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Vegetable prices moved upwards here in the first fortnight of July, amid supply disruptions from major producing centres to organised mandis.
While cabbage moved up by 40 per cent to sell in the Vashi Agricultural Produce Marketing Committee (APMC) yeard at Rs 14-16 a kg, tomato also surged 20 per cent to trade at Rs 36-40 a kg. Retailers in the vicinity have been selling vegetables at 80-100 per cent higher than the stockists' price in the APMC market.
Some vegetables that had witnessed an abnormal rise earlier have, however, cooled a bit. Overall, prices of vegetables continue to remain high; tomato, for example, is selling between Rs 60-80 a kg in the retail market.
Rising vegetable prices have also impacted macro economic fundamentals and the wholesale price index (WPI) has moved up to 4.86 per cent for June as against 4.70 per cent in the previous month. In June 2012, however, it stood at 7.58 per cent.
Naina Lal Kidwai, head of the Federation of Indian Chambers of Commerce and Industry (Ficci), attributed the marginal WPI rise for June to an upsurge in food prices, especially vegetables.
"Food article prices, especially of vegetables, witnessed a sharp spike owing to seasonal factors. Vegetable prices increased by 16.47 per cent in June, a relative surge from 4.85 per cent in May 2013. Also the prices of cereals remain elevated. Overall food articles' inflation was 9.74 per cent in June; the corresponding number last month was 8.25 per cent and a year back was 10.91 per cent," she said.
Traders have started transporting many truckloads of vegetables directly to local mandis, bypassing, the APMC to evade mandi and all other state levies. This has resulted in lower availability of goods in the state APMC market.
"Sowing was delayed because of the lack of pre-monsoon rainfall this year. Since monsoon rainfalls started almost in time, farmers started planting of vegetable seeds late by over a month. The new season crops would be harvested towards July-end. Hence, prices are expected to soften in 10-15 days," said Avinash Patil, head, vegetable section, Vashi APMC.
Ficci reiterated the need to gear up steps to address the issue of supply-side bottlenecks. There is an urgent need to enhance public investment in agriculture as against subsidies and step up agriculture productivity.
"Traders are playing smart to take advantage of the supply shortage. They have started supplying directly to the Byculla and Dadar mandis directly bypassing the Vashi APMC. Consequently, the supply of all vegetables has reduced in the APMC, resulting in the price hike," said Ramesh Hiwale, a bhindi stockist in Vashi.
The Associated Chambers of Comerce and Industry blamed a bad monsoon for the vegetable price hike. "Almost all vegetables in the city's markets have become costlier, with many becoming out of reach of the middle class. Fruits have also become a luxury for the lower middle class; one spends less on buying a litre of fruit juice than a kilo of fresh fruits. Packed fruit juices appear a better option for them," said D S Rawat, secretary-general of Assocham.
