Traders said prices have shot up significantly in the last six months and so it will take time to match last year’s level. By mid-January, prices will fall further from the current level and may be at par with last year, which is expected to have a moderating effect on food inflation in the coming months.
“Tomatoes, potatoes and onions are the most consumed vegetables in India. The prices of these three have remained high for quite some time now. Vegetable inflation will gradually come down in the fourth quarter. We are estimating the overall inflation to fall under 4.5% in March,” said Dharmakirti Joshi, chief economist, CRISIL.
Commenting on the price fall, economist Dipankar Dasgupta, a former professor at the Indian Statistical Institute, said “I would hope for a moderation in rate of inflation due to the price fall of TOP (tomato, onion, potato). Consumers, who work in the formal sector will get some relief, but the current prices, even after a decline, remain a pain point for those engaged in the informal sector until the prices fall significantly.”
Potato prices have fallen as the acreage for the crop has increased, the arrivals of the new crop are strong in Uttar Pradesh, the largest producer, and the cold storages which had been holding stock for a further rise in prices are now being forced to liquidate the old stock.
Tomato prices have fallen as production has been higher in Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh and arrivals have improved in the mandis (wholesale markets) across the country, said Ashok Kaushik, a member of Azadpur Market Tomato Association, adding that prices will correct further.
“Prices of potato will remain on the lower side in 2025 as the production is expected to be robust and a rise in acreage in West Bengal,” said Arvind Agarwal, president of Uttar Pradesh Cold Storage Association.
Onion prices, which had hit a five-year high in November, have started to decline with increasing arrival of the new crop across the country. At the benchmark Lasalgaon wholesale market in Maharashtra, which sets the onion prices in the country, the average onion price crashed by 36% in the last fortnight from Rs 37 per kg on December 1 to Rs 23.5 per kg on Monday.
The maximum prices for good quality onions had consistently stayed around Rs 50 per kg in the wholesale market and around Rs 80 per kg in the retail trade through November. The price of onion last December was Rs 22 per kg at the retail end. Onion prices are expected to remain under pressure in January due to increasing availability of low shelf-life onions. According to the industry estimates, the production of the late kharif onion is expected to be 135% higher than last year, while the area planted under the rabi crop, which will be harvested March onward and stored for the next year, is also expected to be higher due to higher rainfall that increased the water availability.
Potato acreage increased by 10% in West Bengal this year, said Patit Paban De, member of West Bengal Cold Storage association. Potatoes are grown in 4.7 lakh hectares in the state. Last year, while Uttar Pradesh produced 160 lakh tonnes of potatoes, Bengal produced 90 lakh tonnes of the tuber.