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Home / Business News / Prices of three key vegetables unlikely to go down for now

Prices of three key vegetables unlikely to go down for now

According to the data, production of major horticulture crops touched a record 310.74 million tonnes during 2018-19, but the output of the three key vegetables – onion, potato and tomato – was lower than the previous high in 2017-18.

business Updated: Jan 30, 2020 06:26 IST
HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
A women shops for vegetables at a market in Prayagraj, India.
A women shops for vegetables at a market in Prayagraj, India.(AP)

Will the production of potato, onion and tomato, which together account for 44% of the typical household budget for vegetables, show an improvement in 2019-20 over 2018-19?

At various times of the year, particularly in December 2019 and January, supply shocks caused the price of onion to soar.

In the 2019-20 crop year, the good news is that the output of these vegetables is projected to rise marginally over 2018-19, according to the first advance estimates of the farm ministry. Onion production is expected to increase as much as 7%. Potato by 3.49%, and tomato by 1.68%.

Those estimates, however, don’t match the situation on the ground. The winter onion crop of 2019-20 is yet to be harvested and a nearly 25% fall in summer output, as estimated by the farm ministry, coupled with lower production in 2018-19, have kept prices high. This means that the ministry is expecting a big increase in winter output, which will compensate for the lost output from the summer crop.

 

And if the final estimates for 2018-19, which are now out, are any indication, a shortfall could well be on the cards in the current year.

According to the data, production of major horticulture crops touched a record 310.74 million tonnes during 2018-19, but the output of the three key vegetables – onion, potato and tomato – was lower than the previous high in 2017-18, according to final data from the agriculture ministry.

Interestingly, the final production figures for onion, potato and tomato in 2018-19 show a considerable gap between what was initially projected by the farm ministry and the final output. This shortfall has impacted market supplies and is a key reason for high vegetable prices.

For instance, the initial forecast for onion production in 2018-19, made in the first advance estimates of January 2019, was 23.62 million tonnes. Actual production output was 3% lower, as the final estimates now show.

Similarly, the forecast for potato production in 2018-19 was 52.58 million tonnes, while actual output is now pegged to be 2.39 million tonnes lower. In the case of tomato, the initial forecast for 2018-19 was 20.51 million tonnes. Actual output is now estimated to be 1.5 million tonnes lower.

When compared to 2018-19, the total horticulture production in 2019-20, according to the advance estimates, is expected to be just 0.84% higher at 313.35 million tonnes.

According to the first estimates for 2019-20, onion production is expected to increase 7% to 24.45 million tonne, while potato production is expected to be 51.94 million tonne, an increase of 3.49%. The projection for tomato output is estimated to be 19.33 million tonne, an increase of 1.68%.

Onions are the second-most consumed vegetable in the country after potatoes. An average Indian household spends 13% of its total vegetable bill on onions alone, according to HT Research. Potatoes are the most consumed vegetable in India, with a share of 20% in total vegetable spending.

Onion production in 2018-19 was 22.82 million tonnes, which is lesser than the production of 2017-18 of 23.26 million tonnes. The output of potatoes in 2018-19 was 50.19 million tonnes, lower than 2017-18’s 51.3 million tonnes. Tomato production in 2018-19 was 19.01 million tonnes, which is lower than the production in 2017-18 of 20 million tonnes.

Despite projection of slightly higher output in 2019-20, according to information received from states, price volatility remains a major risk because of post-harvest losses and a lack adequate food processing infrastructure, said Anand Kumar Sood of Comtrade, a commodity trading firm.

A delayed June-September monsoon last year, followed by floods in several states, had led to crop damage in major states, leading to a spike in prices. According to government data, food inflation rose 14.12% in December 2019 as against a 10.01% rise in the previous month.