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Wholesale onion prices stand at  ₹40-70 per kg while retail prices are at  ₹70-100 per kg (PTI)
Wholesale onion prices stand at 40-70 per kg while retail prices are at 70-100 per kg (PTI)

Rising retail prices of vegetables may not cool down till January

The price rise, which has come at a time of job losses and reduced incomes in the wake of the coronavirus outbreak, has forced many poor families to curtail consumption.

Retail prices of commonly-used vegetables have spiked over the past month, with potatoes selling at more than 40 per kg, onions at 70-100 per kg depending, and tomatoes at 50-70 per kg.

The price rise, which has come at a time of job losses and reduced incomes in the wake of the coronavirus outbreak, has forced many poor families to curtail consumption. Worryingly, onion and potato prices are likely to stay firm till January.

Overall, retail food inflation in September stood at a steep 10.7%, driven by higher prices of vegetables, pulses, and animal proteins. In September, potato prices were up 102% from a year ago to its highest in five years, while tomatoes were 55% costlier. Only onion prices were lower year-on-year, because of the high prices that prevailed in the previous year.

Potato prices have climbed steadily this year because of lower plantings and production, which was impacted by adverse weather during the harvest season in February-March in the potato-growing regions of Uttar Pradesh. Excess rain during the harvest of kharif onions in October led to significant crop damage across states such as Maharashtra and Karnataka, forcing the government to impose a stock limit on trade and allow imports.

The storage volumes of potatoes were lower in 2020 by around 20 million bags of 50kg each because of lower production, according to Bhuvesh Agarwal, vice president of the Cold Store Association in Agra, Uttar Pradesh. The state government has asked cold storages to empty the stocks stored by farmers by end October, but this is likely to happen only by mid-November. “Despite the arrival of potatoes from Himachal Pradesh and Punjab in November-December, wholesale prices are unlikely to fall below 25 per kg. By February prices should fall to 15 per kg with the arrival of the new crop," Agarwal said. This means consumers will have to shell out around 40 per kg for another month or two.

Onion prices are unlikely to cool down soon either. “More than half of the crop is damaged in Maharashtra because of excess rain," said Deepak Pagar, an onion grower from Nashik. Wholesale onion prices stand at 40-70 per kg, Pagar said. “Farmers can recover their losses only if the government does not allow free imports and we receive at least 55 per kg of onions," he said.

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