Global Economy

Higher fuel and food prices dampen festive spirit for Indians


Spiralling fuel prices, untimely rains and costlier kitchen staples like onion, potato and tomato are making it a tough festive season for Indian households.

Prices of rice, both basmati and non-basmati, have also gone up. In some cities, tomato costs Rs 100 per kg, pinching the pockets of people.

“There had been heavy rains in the last two months which have impacted both onions and tomatoes. The onions that were stored got damaged due to rains, which has impacted the price,” Vegetable Growers Association of India president Shriram Gadhave told ET.

The price of onion at the retail end in metros like Mumbai, Kolkata and Delhi is now hovering around Rs 50-60 per kg.

“Prices of onion will fall only when the new crop comes, which is around by the third and fourth weeks of November. Before that, we do not see prices to tame. The new crop has been delayed due to heavy rains,” said Gadhave.

Heavy rains in the southern part of the country have damaged the onion crop in the region, which is why the entire demand is now being catered by Nashik, said Jayachandra Muthyala, director of Nashik-based Jayachandra Foods, a leading onion merchant.

Maharashtra, Karnataka and Andhra Pradesh are the major onion-producing states, accounting for more than 75% of the total summer onion output. All of these states witnessed delays or damage to summer onion crops due to rains.

Tomato prices have skyrocketed over the last fortnight and in places like Kolkata they are selling at Rs 100 per kg.

Swapan Mondol, a vegetable trader, said recent rains had spoiled the crop. “Also, there is festive demand, which is pushing up prices. It will at least take another 15-20 days for the prices to fall,” he said.

In the case of potato, the early crop in September has been damaged due to rains in West Bengal, Punjab and Uttar Pradesh. As a result, there is pressure on the potatoes stored in cold storages to meet domestic consumption, resulting in prices moving up by more than 60% at the wholesale level.

For rice, prices have risen 10-15% as the kharif crop has been damaged by rains. “The rising fuel cost is further impacting the prices as traders are trying to cover the transport cost,” said a rice dealer from Kolkata.



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