“This is a seasonal issue that the restaurant and food industry has to deal with every monsoon,” McDonald’s India West & South franchisee said in a statement.
In an attempt to generate new ideas on how to improve India’s tomato value chain and lower prices, the government has invited the public to a Tomato Grand Challenge Hackathon.
Tomato prices typically spike during the June and July growing season before the August harvest period, Yeo told CNBC.
“The above-average temperature during June and July 2023, plus the late start of the 2023 southwest monsoon, has affected production,” it said.
He said the rise of tomato mosaic virus in recent years has also resulted in varying degrees of crop damage, ranging from partial to complete losses. The disease is characterized by a mottled or mosaic appearance on the foliage and can lead to a reduction in the size, quality and quantity of yield.
Compared to July last year, tomato prices increased by 166%, according to government data. Consequently, the impression of inflation for India is likely up 4.58% year-on-year in June as food prices soared, according to a Reuters poll.
Prices of tomatoes, onions and potatoes are often «highly volatile» and face relatively inelastic demand as they are staples consumed by Indian locals, said Radhika Rao, a senior economist at DBS Bank.
That said, tomato prices could simmer next month when harvest begins, analysts forecast.
«Expectations are for summer crop supplies to arrive next month, which will help to calm prices, before which administrative measures including higher imports could be used,» Rao said.
Similarly, BMI’s Yeo said the August tomato crops will start to arrive, and even if low, the new volume could bring some relief to prices.