Tomato vs Onion! The Big Battle Of Vegetables

After tomato, onion prices are expected to increase significantly in the coming months led by shortfall in supplies which will ultimately push the already high food inflation higher and maybe a concern for the Reserve Bank of India which is widely predicted to keep the repo rate unchanged this week.

Onion prices are expected to rise to Rs 60-70 per kg in the retail market starting early September on a likely shortfall in supplies, Crisil said in a research report. However, prices should soften as supplies improve in October.

"Rabi stocks in the open market are expected to decline significantly by the end of August instead of September, extending the lean season by 15-20 days, which is likely to expose the market to tightened supplies and high prices," Crisil noted in the report. It said unusual weather conditions disrupted the traditional supply schedules.

Onion prices currently hover around Rs 30 per kg.

Unusual rain across the country has caused major distuption in cultivation of crops in the past few months.

Tomato prices are anywhere between Rs 160-210 per kg in most states on India. Last month, McDonald's restaurants in North and East India stopped serving tomatoes in its burgers and wraps over supply issues as surging prices of the vegetable.

In the meantime, demand for ketch-up and other tomato substitutes have increased, specially in the food industry.

The monsoon season has a crucial role in Indian agriculture. Insufficient rainfall or uneven distribution can affect crop yields, leading to price volatility.

Onion supplies will ease once kharif arrivals start from October, leading to softening of prices, the report said.

The price movement in the festive months (October-December) is expected to stabilise, the report stated.