Govt starts selling tomatoes at ₹65 per kg across Delhi as festival season rolls in

The government started selling tomatoes and onions at a discounted price in Delhi from Monday amid the festive season, according to a senior government official. 

Tomato prices, which have been selling for an average of ₹100 per kg and even more in some regions, will be available for ₹65 a kg at select government outlets.

The subsidized tomatoes will be sold through vans operated by the National Cooperative Consumers Federation of India Ltd's (NCCF) at 50 locations in Delhi. The discounted tomatoes will also be available in Noida, Ghaziabad and Gurugram.

Union consumer affairs secretary Nidhi Khare launched the scheme on Monday and it will be extended to other cities – as in 2023, when prices touched ₹250 per kg.

“The timely intervention is aimed at making tomatoes available at a reasonable rate for consumers during the ongoing Navratri and other upcoming festivals,” said consumer affairs secretary Nidhi Khare after the launch.

“The price increase is not due to a shortage, but is a result of cartelization aimed at making undue profits. This intervention is well-timed, in contrast to last year when prices soared past ₹250/kg,” Khare said.

"With this, we are hopeful that retail prices will stabilize at ₹65 in the next few days," Khare said.

“The NCCF has procured tomatoes from local mandis at wholesale rates. It is sold at no-profit-no-loss model to ensure that traders do not make undue profits,” the official said.

The retail price of tomatoes has seen a huge increase in recent weeks, despite the continuous arrival of good quantities in mandis. Rains and high humidity caused by the prolonged monsoon in major producing states like Andhra Pradesh, Karnataka and Maharashtra have reportedly led to quality concerns.

The possible role of market intermediaries in driving the current price rise during this high-demand festive season cannot be ruled out.

According to the government's third advance estimates, tomato production is seen rising by 4.38% to 21.32 million tonnes in 2023-24, driven by last year's price surge. 

The government's intervention comes amid lingering concerns over high food inflation, which rose to 5.66% in August from 5.42% in July. The prices of tomatoes, onions and potatoes, essential food items for Indian households, significantly impact the cost of a home-cooked meal.

Also Read: Festive season spurs consumer spending in smaller towns

According to a 4 October report by rating agency Crisil, the cost of a home-cooked vegetarian meal surged 11% year-on-year in September, driven by rising vegetable prices.

Vegetable prices continued to rise in September, with onions and potatoes experiencing significant increases. Onion prices surged by 53%, and potato prices rose by 50% year-on-year due to lower supplies. 

This is the second time the government has intervened by selling discounted tomatoes. The Centre launched a similar initiative on 29 July when tomato prices first touched ₹80-100 per kg this year. At that time, tomatoes were sold at ₹60 per kg.

In 2023, about 60 tonnes of tomatoes, including 10 tonnes imported from Nepal, were sold at cheaper rates through the NCCF.

Food inflation rose to 9.36% in June, 8.69% in May, and 8.70% in April.

Also Read: August inflation: What CPI data tells us beyond the base effect, in charts

Subsidized onions

The government is also selling subsidized onions at ₹35 per kg through NCCF and NAFED outlets across the country.

The government has an onion buffer stock of 470,000 tonnes. From this stock, it is releasing onions in wholesale markets to try and control prices.

In 2023, onions were purchased from farmers at ₹17-18 per kg. This year, the procurement price has increased to ₹26-27 per kg.

The onion buffer serves two purposes—it supports farmers by providing a stable procurement price and benefits consumers when subsidized onions are released into the market.

Also read: Government to rope in railways to rein-in sky high onion prices

As onion prices soared to ₹90 per kg, the government began selling subsidized onions at ₹25 per kg in 19 cities through its cooperative agencies, starting in August 2023.

The subsidized tomatoes will be available at various locations across Delhi such as South Extension, CGO Complex, Krishi Bhawan, NCUI Complex, Dwarka Sector 1, Rohini Sector 2, Parliament Street, R.K. Puram Sector 10, Jasola, Kaka Nagar, Yamuna Vihar C-Block, Model Town, Preet Vihar, INA Market, Mehrauli, Moti Nagar, Kali Baadi, Najafgarh, Mayapuri, Lodhi Colony, Nehru Place, Rajiv Chowk Metro Station, Patel Chowk Metro Station, New Friends Colony, Munirka, Nangal Raya, Dhaula Kuan, Karol Bagh, Rajouri Garden, Malviya Nagar, Saket, Ghitorni, Sarvpriya Vihar, Harkesh Nagar, Kalkaji, Sadik Nagar, Modern Town, Chandni Chowk, ITO, Badarpur Border, Uttam Nagar, Okhla Phase-2, Karkarduma, Shastri Park, Kidwai Nagar Phase-1, Kashmere Gate, Daryaganj, Shalimar Bagh, Shahdara, and Dilshad Garden.