India: Triple whammy as dal, tomato & potato prices surge together

It’s the triple whammy of a huge increase in the cost of tomatoes, potatoes, arhar dal and urad dal - all staple foods. It hasn’t helped that the government’s efforts to build stocks of dals, has been either absent or ineffective.

Arhar dal now costs as much as Rs 170/kg. Urad dal is selling for as high as Rs 196/kg. Tomatoes are going for Rs 100 a kg. And potato prices are up to almost Rs 20/kg.

Dal production has been hit due to last year’s drought, almost doubling its prices. Higher-than-expected heat has destroyed some tomato crop, which may have constricted its supply, pushing And a blight that swept across potato fields in Bengal, has hit the tuber’s supply.

The situation is so bad that vegetable price inflation rose 2.21 percent to 12.94%. That then badly hit the Wholesale Price Index, pushing it to 0.79% in May, its highest level in 19 months. And with no change in the already high inflation in the price of dals - at 35.56 percent - food inflation on the whole spiked to 7.88% in May from 4.23% a month earlier.

The government’s target is to procure 1.5 lakh tonnes of dals - or pulses - for buffer stock creation and so far, 1.15 lakh tonnes have been purchased during the kharif and rabi seasons, food minister Ram Vilas Paswan said. He added that rabi crop procurement is still going on, he added.

India imported 5.5 million tonnes of pulses last year. The country’s pulses production is estimated to be 17.06 million tonnes in 2015-16 crop year (July-June), while the demand is pegged at 23.5 million tonnes.

In the last two years, arhar dal prices have doubled and the cost of urad has increased by around 120%. Even the price of chana dal, which is produced in large quantities and is usually unaffected by inflation, has risen 85% in this period, in Delhi.

The case of the two staple vegetables - potatoes and tomatoes - is slightly different. Both are shorter duration crops. But both have seen prices surge.