Indian families are feeling the effects of rising prices to an extent that they are even being forced to cut consumption of certain vegetables. A survey has indicated that as many as 16% Indian household consumers are cutting consumption or feeling the pinch of rising prices of onion, potato and tomato. Significantly, another 31% are likely to be impacted, the survey revealed. This would happen once per kg prices cross Rs 50 for these items.
According to the survey by Local Circles, the heat and the humidity has caused the prices of essential vegetables, including of onion, potato, and tomato, to jump up by 20% to 50% over the recent weeks. Fruit prices too have been rising over this period.
The faultlines
Vegetable vendors say supply is lagging demand and causing the rise in prices. The supply has been affected, according to farmers, because of the lack of rainfall and poor water availability besides the high heat, causing production to plummet.
Worryingly, the survey, quoting the statistics ministry data, points out, “India’s food inflation is expected to rise, after hitting a four-month high of 8.7% in April from 8.5% in March. Even rural consumers are witnessing a sharper uptick of 8.75%.”
Quoting further from government data, it added that food inflation has affected the Indian economy since 2023 including:
1. Vegetables at +28% YoY
2. Pulses at +17% YoY
3. Cereals at +8.6% YoY
4. Meat and fish at +8.2% YoY
5. Spices at +7.8% YoY
6. Eggs at +7.1% YoY.
With this as the background, LocalCircles says it conducted a national survey with the intention to find out how much more are households having to shell out and whether high vegetable prices are impacting the buying pattern or leading to reduction in consumption.
What the survey asked and how Indian households responded
In times of price rise, many households turn to buying potato and onion and to some extent tomatoes, leaving other, pricier, veggies.
The survey, carried out in the format of a questionnaire, asked :
Q 1. “What best describes the per kilogram price that your household paid for tomato, onion and potato in your latest purchase?”
As many as 13,597 consumers responded:
a) 44% stated that they bought “tomato for INR 30 or higher, potato INR 35 or higher and onion INR 40 or higher” per kg;
b) 22% of consumers indicated that they bought “tomato for INR 20-30, potato INR 30- 35 and onion for INR 35-40”;
c) 7% indicated that they bought “tomato for INR 20-25, potato for INR 25-30 and onion for INR 30-35” per kg;
d) 9% indicated that they bought “tomato for INR 20 or lower, potato for INR 25 or lower and onion for INR 30 or lower”.
Note: 18% did not give a clear answer.
Summary
2 in 3 household consumers surveyed confirm paying INR 25/kg or more for tomato, INR 30/kg or more for potato and INR 35/kg or more for onion.
Q2. The question was on the impact on the household budget – “At what price point for potato, onion and tomato are you likely to cut consumption or feel the pinch?”
As many as 13,840 responses were received
a) 11% stated “if price of these essential items goes above INR 60/kg”;
b) 20% of respondents indicated “if price of these essential items goes above INR 50/kg”;
c) 11% of respondents indicated “if price of these essential items goes above INR 40/kg”;
d) 16% of respondents stated “we are already cutting consumption or feel the pinch.
e) 29% of respondents stated, “our household is not likely to cut consumption or feel the pinch regardless of the price of these items”
Note: 13% of those surveyed did not give a clear answer.
Summary
In effect, 16% of consumers surveyed shared that their household is cutting consumption or feeling the pinch of rising prices of Onion, Potato and Tomato; Another 31% are likely to be impacted once per kg prices cross INR 50 for these items.
A survey has indicated that as many as 16% household consumers are cutting consumption or feeling the pinch of rising prices of Onion, Potato and Tomato. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
