Will prices of onion, tomato, potato go down? It's unlikely
What's the story
Onion, tomato, and potato are the most prominent vegetables used across India, but a hike in their prices negatively affected household budgets.
With the onset of the new year and a fresh cultivating season upon us, it was expected that consumers will get a reprieve.
However, an HT report has said this is unlikely for now. Let's divulge deep into this.
Estimates
The farm ministry is expecting a marginal rise in production
In 2019, kitchens struggled to keep up with the rising prices of onion. But the production could slightly improve in 2019-20 crop year, as per the initial estimates of the farm industry.
The ministry hopes that onion production increases by 7%, as compared to 2018-19.
And the production of tomato and potato is expected to rise by 1.68% and 3.49% respectively.
Reality
Like 2018-19, production might fall short this time too
The expectations, however, don't match the reality on the ground. The winter crop is yet to be harvested, and there was a nearly 25% dip in summer crop.
While the ministry is hoping that winter's harvest makes up for the loss in summer, it might not happen.
The shortfall in 2018-19 could very well continue this year too.
Details
Estimates v/s. actual production: Onion and potato witnessed a slump
Like now, the government was optimistic in 2018-19 too, but the production didn't live up to it.
For instance, the ministry expected onion production to be around 23.62 million tonnes, as per data of January 2019. But the actual output was 3% less.
Likewise, potato's production was expected to be 52.58 million tonnes, but actually it was 2.39 million tonnes lower.
Do you know?
Production-wise, 2017-18 was better than 2018-19
As compared to 2017-18, 2018-19 was worse. In the former time frame, onion production was 23.26 million tonnes. Similarly, the production of potato in the same time period was 51.3 million tonnes, while 20 million tonnes of tomato were produced.
Prices
Production might increase, but prices won't fall
Although the ministry has estimated the production will rise marginally, prices will not see much of a dip.
Anand Kumar Sood of Comtrade, a commodity trading firm, said due to post-harvest losses and the absence of adequate food processing infrastructure, prices will not come down.
Last year, the monsoons arrived late, and floods too rocked several states, further leading to a rise in prices.
Budget
Will Sitharaman's budget provide a relief to common man?
With prices of three most-used vegetables sky-rocketing (an average Indian household spends 13% of its budget on onion alone), the pressure is on Finance Minister Nirmala Sitharaman to announce concrete measures in the upcoming budget of February 1.
To note, inflation touched 7.35% in December, going way beyond the bandwidth of RBI, and all eyes are on Sitharaman to provide relief to struggling Indians.