Soaring vegetable prices strain household budgets: Major cities feeling the pinch

Soaring temperatures, power cuts, and water shortages have driven up demand for fruits and vegetables, resulting in a 20 to 50 percent price hike for essential items like onion, potato, and tomato in recent weeks.

BySouth First Desk

Published Jun 21, 2024 | 8:00 AM Updated Jun 21, 2024 | 8:00 AM

Soaring vegetable prices strain household budgets: Major cities feeling the pinch

With the summer monsoon arriving early but sporadically in Kerala, much of India is grappling with soaring temperatures, power cuts, and water shortages. This has led to an increased demand for fruits and vegetables, which in turn has caused a significant hike in prices.

The prices of essential vegetables like onion, potato, and tomato have surged by 20 percent to 50 percent in recent weeks, further straining household budgets.

In response to the growing discussion about the rising prices of essential vegetables, LocalCircles, a community social media platform, conducted a national survey to determine how much more households are spending and whether these high prices are affecting purchasing patterns and leading to reduced consumption for some families.

The survey garnered over 27,000 responses from 316 districts, and reveals a concerning trend.

61 percent respondents were men while 39 percent respondents were women. 40 percent respondents were from tier 1, 28 percent from tier 2 and 32 percent respondents were from tier 3, 4 and rural districts.

The survey aimed to understand how much more households are paying for these essential vegetables and whether these price hikes are affecting consumption patterns.

The survey first asked consumers, “What best describes the per kilogram price that your household paid for tomato, onion and potato in your latest purchase?”

Additionally, as price directly impacts the household budget, the survey also asked, “At what price point for potato, onion and tomato are you likely to cut consumption or feel the pinch?”

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Survey finding in Bengaluru

The survey conducted in Bengaluru received a total of 3,688 responses from participants. When asked about the latest purchase prices for tomatoes, onions, and potatoes, the majority of respondents indicated a substantial increase.

66 percent of households in the city reported paying ₹30 or higher for tomatoes, ₹35 or higher for potatoes, and ₹40 or higher for onions. 20 percent paid between ₹25-30 for tomatoes, ₹30-35 for potatoes, and ₹35-40 for onions.

10 percent paid ₹20-25 for tomatoes, ₹25-30 for potatoes, and ₹30-35 for onions while only one percent paid below these amounts.

Out of the participants in the survey28 percent said they would cut consumption if prices exceed ₹60/kg while 17 percent said they would cut consumption if prices cross ₹50/kg.

10 percent said they would feel the pinch if prices exceed ₹40/kg while 16 percent are already reducing consumption. 26 percent would not change their consumption regardless of price.

Telangana

In Telangana, the survey received a total of 3,636 responses from participants when asked about the per kilogram price paid for the essential vegetables.

While 61 percent paid ₹30 or higher for tomatoes, ₹35 or higher for potatoes, and ₹40 or higher for onions, 19 percent paid ₹25-30 for tomatoes, ₹30-35 for potatoes, and ₹35-40 for onions.

7 percent paid ₹20-25 for tomatoes, ₹25-30 for potatoes, and ₹30-35 for onions.

21 percent of the participants said they would cut consumption if the cost of essential vegetables exceeds ₹60/kg while 24 percent would cut consumption at ₹50/kg.

19 percent said they would feel the pinch if prices cross ₹40/kg, while 14 percent said that they are already reducing consumption. 27 percent said they would not change their consumption regardless of price.

Chennai

In Chennai, 69 percent paid ₹30 or higher for tomatoes, ₹35 or higher for potatoes, and ₹40 or higher for onions.

22 percent paid ₹25-30 for tomatoes, ₹30-35 for potatoes, and ₹35-40 for onions while 4 percent paid ₹20-25 for tomatoes, ₹25-30 for potatoes, and ₹30-35 for onions.

Of the participants, 25 percent said they would cut consumption if the prices exceed ₹60/kg. 24 percent said they would cut consumption if prices cross ₹50/kg, while 6 percent said they would cut consumption at ₹40/kg.

14 percent are already reducing consumption and 28 percent would not change their consumption regardless of price.

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Nationwide impact

Across the country, 2 in 3 households surveyed reported paying ₹25/kg or more for tomatoes, ₹30/kg or more for potatoes, and ₹35/kg or more for onions.

This is a significant increase from average prices, indicating a sharp uptick in food inflation, which has been exacerbated by erratic weather patterns, reduced rainfall, and high temperatures affecting crop yields.

Local vegetable vendors attribute the price rise to reduced supply. Farmers have reported that the lack of rainfall and poor water availability, coupled with high temperatures, have severely impacted production.

Consequently, India’s food inflation, which hit a four-month high of 8.7percent in April, is expected to climb further.

Government’s response

RBI Governor Shaktikanta Das, while announcing the bi-monthly monetary policy, highlighted the stress on the summer crop of vegetables and fruits due to the exceptionally hot summer and low reservoir levels.

He emphasized the need to carefully monitor the arrivals of rabi pulses and vegetables.

As temperatures soar and supply dwindles, the rising prices of essential vegetables are straining household budgets across major cities in India.

Given the critical situation, it is imperative for the government and local administrations to proactively manage the supply chain to prevent stockists and retailers from taking undue advantage of the situation.

With households already feeling the financial strain, measures to stabilize prices and ensure adequate supply are crucial to mitigating the impact of this price surge on consumers.

(Edited by Shauqueen Mizaj)

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