T
he humble tomato is the new symbol of the turbulent food supply chain, after the Reserve Bank of India (RBI) flagged significant price rises as a driver of inflation in July. This came from wild weather hitting growers, many of whom had left crops in fields earlier in the year when the level of wholesale prices wasn’t enough to cover farmers’ production and transport costs.
The most recent RBI monetary policy committee minutes, released last week, show there is still a concern: “Going forward, the spike in vegetable prices, led by tomatoes, would exert sizeable upside pressures on the near-term headline inflation trajectory,” the committee warned.
Tomato prices rose by up to 450 per cent over the summer, with food inflation of 12 per cent in July the highest level since January 2020. Fast-food restaurants, eager to protect margins, removed tomatoes from their menus in response. Also in India, a block on exports of non-basmati rice “appears to be a warning shot of escalating food protectionism”, according to Capital Economics. It forecasts a 10 per cent drop in global rice exports in 2023-24.