Agri Business

Rising output spells grief for vegetable farmers

Tina Edwin New Delhi | Updated on January 13, 2018

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Note ban speeds price fall of staples in wholesale markets, pushes rates well below year-ago levels

A good monsoon and higher produce have kept vegetable prices down for many months and demonetisation may have only depressed the already lower prices in November and December.

With summer approaching and demonetisation impact gradually easing, prices of some vegetables are beginning to rise. But the wholesale prices of common staples such as onions, tomatoes, cabbages, okras (also known as ladies finger), and brinjal are far lower than what they were a year ago; in some markets the prices have halved.

Onions slide

For about 15 months now, onion prices have been lower than in the year-ago period. The slide began in December 2015 after staying elevated between July and November 2015 amid shortages caused by crop losses in some regions and hoarding by stockists.

Wholesale prices of onion have crashed in many markets in western India, the key producing area. According to AgmarkNet, the prices have fallen to around ₹500 a quintal in Maharashtra, a multi-year low. The average price in February last year was ₹800/quintal in the State. Lasalgaon, in Maharashtra, is home to the largest wholesale operations for onions in the country.

At the all-India level, the wholesale price of the bulb is about ₹1,200/quintal, and that’s because prices in the North-East and southern States such as Kerala are much higher.

Tomatoes cool off

Tomato prices, too, have been down for the almost a year now, save for the spurt seen in June-July 2016. In Madhya Pradesh and Chhattisgarh, where a large number of farmers raise tomatoes, the wholesale prices were a little over ₹300/quintal in February 2017.

In West Bengal and Uttar Pradesh, the prices were around ₹500/quintal. This is far lower than the wholesale prices a year ago.

In February 2016, tomatoes were selling at ₹600/quintal in Madhya Pradesh, ₹440 in Chhattisgarh, and ₹1,100 in Uttar Pradesh. In West Bengal, the prices were slightly lower at around ₹545/ quintal.

However, the crash is prices becomes dramatic when compared with those in the peak summer months, although such comparisons are not fair due to seasonal factors.

Potatoes stay firm

In contrast to movement of prices of most vegetables, potato was the only staple where wholesale prices stayed firm through much of the last one year compared with 2015. Wholesale price of potatoes in 2015 were sharply lower than in 2014, and thus 2016 prices represent a rebound from the lows of the previous year.

Wholesale prices of the tuber has shown some weakening in the current calendar year. The prices have fallen below ₹300/quintal in Punjab, to around ₹360 in Haryana, and to a little over ₹400 in Madhya Pradesh, Uttar Pradesh and West Bengal. In February 2016, the prices were higher by at least ₹100/quintal.

Other commonly consumed vegetables such as cabbage, okra and brinjal have also been cheaper since September 2016, compared to the same month a year ago, helped mostly by good yield following a better monsoon last year.

However, the prices of these vegetables, particularly okra, firmed up in February. Wholesale prices of cabbage is currently under ₹800/quintal, about 14 per cent higher than the year-ago prices. Cabbages usually are the cheapest in February and March. Likewise, wholesale prices of okra were about 34 per cent higher in February compared to a year ago. Brinjal was about nine per cent higher.

Published on March 02, 2017

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