Home-cooked thali costs rise up to 6% in June as tomato, onion prices surge

In June, the cost of home-cooked vegetarian and non-vegetarian thalis increased 5% and 6% on-year, respectively, because of higher prices of tomatoes, onions, vegetable oils and liquefied petroleum gas (LPG) cylinders, which offset the decline in potato prices, according to Crisil’s latest Roti Rice Rate (RRR) Report.

Tomato prices surged 31% on-year owing to delayed and lower summer crop planting, while vegetable oil and LPG prices remained elevated amid global supply disruptions caused by the West Asia conflict.

“The southwest monsoon has remained subdued so far, with cumulative rainfall between June 1 and July 7 around 17% below the long period average. By region, the rainfall deficit is around 15% in South India, 19% in Northwest India, and 39% in East and Northeast India; while Central India is 1% above normal. However, monsoon activity has strengthened over the past one week, advancing into additional parts of Gujarat, and more parts of Haryana and Punjab and is expected to cover the entire country within the next 2-3 days,” says Pushan Sharma, Director, Crisil Intelligence.

The recent rainfall is expected to improve soil moisture levels and support ongoing kharif sowing. Nevertheless, since monsoon rainfall is expected to stay below normal, the temporal and spatial distribution of rainfall for the rest of the season will be a key monitorable.

Under cereals, a prolonged rainfall deficit over major kharif paddy growing regions during flowering could hurt output and limit supplies from major producing states like Bihar, West Bengal, Odisha, Chhattisgarh and Maharashtra, thereby providing support to prices.

Under pulses, lower opening stocks of urad and moong coupled with lower than expected output from Karnataka, Madhya Pradesh and Maharashtra due to inclement weather could keep prices under check.

Under Vegetables, prolonged rainfall deficit is likely to reduce kharif onion and tomato output due to delayed planting followed by moisture stress during critical growth stages.

Lower rabi stocks have supported onion prices in recent months and if kharif output is affected then supplies could tighten further, keeping onions prices firm. Onion prices are expected to remain firm over the medium-term as tightness in rabi supplies spills over and kharif arrivals are delayed.

Potato prices will probably edge higher as farmers gradually release stocks from cold-storage into the market.

Tomato prices are likely to remain firm throughout July-August on account of delayed planting of the kharif crop this season and seasonally lean supplies. However, staggered arrivals of the summer crop, especially from southern states where farmers have re-planted after the summer heat-wave in May & June should ease the seasonal price spike.

While tomato prices are expected to remain sensitive to any further disruption to logistics or fresh damage to crops in major producing states due to monsoon rains in July, prices are likely to ease from September with better arrivals of the kharif crop from southern and western India. However, the degree of correction will depend on the distribution of rains, crop health and smooth movement of supplies.