Tomato prices raise concerns of food inflation, govt offers discounted stocks

At present, tomato supplies are being sourced from Gujarat, Madhya Pradesh, Maharashtra, and Andhra Pradesh. Delhi and nearby cities are receiving tomato stocks from Himachal Pradesh and Karnataka.

Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, stated, “June CPI inflation data will be released this week, with expectations at 4.6 per cent, higher than May’s 4.25 per cent. This increase can be attributed to higher vegetable prices due to unseasonal rains causing supply disruptions. Furthermore, we anticipate core CPI inflation at 5.2 per cent, a 5-basis point increase from the May reading.”

The DRG study report, authored by Puja Padhi, Himani Shekhar, and Akanksha Handa, emphasized that although tomatoes, onions, and potatoes make up a small portion of the Consumer Price Index Combined (CPI-C) basket, they significantly contribute to the volatility of headline inflation.

The report also highlighted that vegetable prices tend to be highly volatile due to their perishability and susceptibility to weather-related disturbances, coupled with less elastic demand, as these vegetables are staples in Indian households.

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