Food inflation: 16% households cut consumption of onion, potato, tomato due to rising price

The rising prices of onion, potato, and tomato are again bothering the consumers across the country. Last week, it was reported that ahead of Eid-al-Adha (Bakra Eid), the prices of onion have risen by almost 30-50 percent in the last two weeks.

A survey conducted by Local Circles reported that 16% household consumers surveyed have cut consumption or are feeling the pinch of rising prices of onion, potato and tomato in recent weeks. 

The report noted that due to inadequate summer monsoon and humid weather, the prices of essential vegetables i.e. onion, potato and tomato have also shot up by 20% to 50% in the last few weeks. It noted that even price for fruits has risen sharply.

India’s food inflation is expected to rise, after hitting a four-month high of 8.7% in April from 8.5% in March. Even rural consumers are witnessing a sharper uptick of 8.75%, according to data released by the statistics ministry. 

"Vegetable vendors blame reduced supply for the rise in prices of vegetables. Farmers state that lack of rainfall and poor water availability besides the high temperature has affected production," the survey noted.

While announcing the bi-monthly monetary policy on June 7, Reserve Bank of India (RBI) Governor Shaktikanta Das warned that the exceptionally hot summer season and low reservoir levels may induce more stress on the summer crop of vegetables and fruits. The rabi arrivals of pulses and vegetables need to be carefully monitored, according to Das. 

Food inflation has been taking a toll on the Indian economy since 2023, with several categories witnessing significant inflation. This includes vegetables at +28% YoY, pulses at +17% YoY, cereals at +8.6% YoY, meat and fish at +8.2% YoY, spices at +7.8% YoY and eggs at +7.1% YoY, according to government data.

The survey found that 2 in 3 household consumers surveyed confirm paying Rs 25/kg or more for tomato, Rs 30/kg or more for potato and Rs 35/kg or more for onion.

Of 13,597 consumers who responded to the question 44% stated that they bought “tomato for Rs 30 or higher, potato Rs 35 or higher and onion Rs 40 or higher” per kg; 22% of consumers indicated that they bought “tomato for Rs 20-30, potato Rs 30-35 and onion for INR 35-40”; 7% indicated that they bought “tomato for Rs 20-25, potato for Rs 25-30 and onion for Rs 30-35” per kg. 

While 9% indicated that they bought “tomato for Rs 20 or lower, potato for Rs 25 or lower and onion for Rs 30 or lower”. In addition, 18% of consumers surveyed did not give a clear answer.

In essence, 2 in 3 household consumers surveyed confirm paying Rs 25/kg or more for tomato, Rs 30/kg or more for potato and Rs 35/kg or more for onion.