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Lacklustre sales despite dip in veg prices

Most consumers remain unwilling to buy half-a-kilo of tomatoes for Rs 50, lament traders, who are hopeful that prices would stabilise at Rs 40 per kg in 15 days,

Lacklustre sales despite dip in veg prices

Manufacturers are waiting for the tomato prices to dip below Rs 50 per kg. (Hemanathan M)

CHENNAI: Prices of many vegetables, including tomatoes, dropped by 10% due to an increase in supply from neighbouring states on Monday. However, the sale has not improved in both the wholesale and retail markets.

Traders said that it would take more than two weeks for the supply to normalise in the city.

“The wholesale market received additional 10 vehicles of tomatoes with 350-400 tonnes on Monday from Karnataka, Andhra Pradesh, Krishnagiri, and Udumalaipettai. Tomato are sold for Rs 110-120 per kg in retail and wholesale markets. Though the rates decreased from Rs 200 per kg, people still buy less thana kilo of tomatoes. We expect that prices would reach to Rs 40 per kg in the next 15 days,” stated R Prabhakaran, a trader at Koyambedu wholesale market.

Similarly, prices of other vegetables marginally decreased. However, with the northeast monsoon to begin in the next two months, the rates are likely to surge yet again and impact the sale. Traders are worried over fluctuating prices due to the sudden change in the weather condition.

“Compared to last week, prices of vegetables especially tomatoes, green chillies and ginger have reduced, but people are not willing to spend Rs 50 for half a kilo of tomatoes. At present, the sale has been impacted by 10-15%. Usually, people purchase a limited volume of vegetables during Aadi month, and an increase in the rates worsened the situation for us,” elaborated R Babu, a retail trader at Purasawalkam.

Tomato rate hurts city’s small-scale industries

Fast-food restaurants such as McDonald’s and Subway in the country removed tomatoes from their burgers and wraps recently, as the supply of the red fruit was interrupted due to intense wet spell that has hit various parts of India.

This resulted in skyrocketing prices of tomatoes, which have slightly decreased to Rs 110-120 per kg in the city.

Several small-scale industries are badly impacted due to shortages in perishable commodities where they are forced to stop products. “The surge in tomato prices has adversely impacted regional manufacturers because we’re forced to stop certain products such as tomato ketchup and pasta sauce. Since the rates of perishable commodity spiked, we stopped manufacturing,” said Abdul Tahir, co-founder of Fouziya cooking in the city.

Manufacturers are waiting for the tomato prices to dip below Rs 50 per kg. Until then the supply and sale would be drastically impacted for small-scale industries. Additionally, ketchup suppliers and manufacturing companies state that the tomato paste purchased from other manufacturers across the country has seen an increase by 20% recently.

“When tomato prices surged due to crop damage during the intense rainfall in north India and Karnataka, the cost of tomato paste increased. When there is a steep spike in prices of perishable commodities, it would impact consumption,” stated Sunil G, director of Ohms Food Products in Chennai. Similar situation prevailed 3 years ago, when there was a shortage in tomatoes during the northeast monsoon.

Several tomato ketchup manufacturing companies stated that they have stocked up on raw materials for 3 months. Harish, director of Rohini’s Food Products said: “Companies did not have feel the impact much though the country witnessed shortage in the supply. If there are crises in the supply of tomato ketchup it would impact the food industry.”

Gusteau Food in Korattur prepares 300-350 kg base-gravy for various dishes to restaurants. But in the past few weeks, they prepare and send only 150 kg, as anything more was unaffordable. “We buy 80% of locally grown tomatoes, and the remaining hybrid variety from Bengaluru due to the crisis. When some dishes such as chicken curry, fish curry, biriyani, and paneer butter masala are prepared with the tomatoes from Tamil Nadu, the taste is different. The supply disruption due to the intense spell adversely affected the crops in Andhra Pradesh and Karnataka. We’re worried that the restaurants may terminate our contract. We’ve already bearing so much loss,” rued Karthick Shanmuga Sundaram, CEO, Gusteau.

He added that tomatoes were sold at a reasonable rate in southern districts of Tamil Nadu. Plus, it also helped that the State government was selling tomatoes in PDS for lesser price.

Traders of wholesale and retail markets claim that tomato prices would decrease to Rs 30 per kg by the end of the month.

Swedha Radhakrishnan
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