In September, vegetable prices, particularly onions and tomatoes, soared due to excessive rains causing crop damage. Onions rose by 50% compared to last year, while tomatoes saw a 14% increase.

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Prices of essential vegetables such as onions and tomatoes have experienced significant increases in September 2024, largely attributed to crop damages caused by excessive rainfall in several regions of India. According to high-frequency data from the Department of Consumer Affairs, the average prices for potatoes and onions surged nearly 50% compared to the same month last year, while tomatoes saw an increase of about 14%.

Onions, in particular, have seen a sharp rise in price, climbing over 11% in September alone, with current costs exceeding Rs 50 per kilogram. Garima Kapoor, an economist at Elara Securities India Pvt., noted that the rise in onion prices is partially due to the recent lifting of export duties, prompting sales from the government’s price stabilization fund to counteract the hike.

The increase in tomato prices is linked to heavy rainfall in key growing states, including Telangana, Andhra Pradesh, Maharashtra, and Gujarat, which has severely impacted farming activities and led to substantial crop damage. Madhavi Arora, a lead economist at Emkay Institutional Equities, highlighted that the recent heavy rainfall and flooding have disrupted supply chains, contributing to the rising food prices, particularly for vegetables.

Moreover, the impact of higher customs duties on imported edible oils has also been reflected in retail prices, which increased by 2.6% sequentially. While cumulative rainfall as of September 18 was reported to be 7% above the long-term average for the season, weekly rainfall was 7% below average, indicating a significant spatial divergence in weather patterns across the country.

As of September 17, the total area under sowing stands at 1,096.7 lakh hectares, which is 2% higher than the same period last year, primarily due to increased sowing of major food crops, including rice, pulses, coarse cereals, and oilseeds. However, concerns remain regarding lower cotton sowing among non-food crops.