Ground report from Delhi’s wholesale markets: Why vegetable sales have dropped in India this summer

The rocketing prices of lemons and tomatoes, and their subsequent drop in sales, made headlines over the last few weeks. But a significant dip in the sales of several other vegetables indicate a greater economic crisis, according to experts. 

The country’s Wholesale Price Index-based inflation climbed to a record high of 15.1 per cent in April 2022. Down to Earth spoke to vegetable and fruit sellers at Azadpur and Okhla markets — two of the largest wholesale fresh produce markets in the country — to understand how it has impacted their sales.

Footfall at Azadpur mandi was almost half during the peak hours in the morning of May 19, 2022, compared to pre-pandemic levels, according to sellers. Vegetables such as ridge gourd, spinach, ladies’ finger have become cheaper over the last few days at these markets and yet, there are very few takers, the shopkeepers said. 

Apart from inflated prices of the vegetables, low supply, soaring prices of staple grains and cooking fuel, heatwave and low purchasing power of consumers due to the COVID-19 pandemic are the driving factors behind this low uptake, experts said. Prices of potatoes and garlic remained the same in the last few months.

Cost of food in India increased 8.38 per cent in April 2022 over 2021; cooking gas prices increased 46 per cent since subsidies were scrapped in May 2020, according to news reports.

Suresh Mukhiya, a tomato seller at Azadpur, said he has been selling half the volume or less of the vegetable than he used to before the pandemic. 

The price of tomatoes rose three times over the last week. “I sold tomatoes at Rs 60 per kilogram today,” Mukhiya said May 19. 

Lemons have become cheaper at present across the country after reaching unprecedented highs: Its wholesale rate reduced to Rs 90 per kg from Rs 120-150 at the beginning of summer. The retail rates were almost double — Rs 250-300 — during the peak hike period. 

But sales have not picked up, according to Avnish and Parash Bhagat, two lemon sellers at Azadpur mandi.

But low supply may be pushing the prices up again, added Bhagat. “Thursday (May 19) saw only two trucks supplying lemons here. Last weekend, the number of supply trucks was eight.”

On an average, vegetable sellers at the mandi reported a 30-50 per cent drop in sales this summer compared to the same period in pre-Covid years, they said. 

Spinach sellers had a similar story to tell. Kishan Kumar said he sold the leafy vegetable at Rs 10 per kg — half of its price last week — at Azadpur mandi on wholesale on Thursday, but there were few takers. The wholesale price at Okhla mandi was Rs 15 per kg.

“Spinach was seasonally available in retail at Rs 30 per kg and such are the times that even when during off season it is being sold largely at Rs 40 per kg in retail against the staple tomatoes available up to Rs 60 per kg, there are very few takers for it, said Brijesh Maurya, who sells vegetables on a pushcart across Okhla. 

He added on Saturday: 

In general, people are not buying vegetables in large quantities. It is 6pm and I have roamed through the entire neighbourhood and its vicinity. I was still unable to sell even half of the 80 kg vegetables I loaded on my cart in the morning.”

“The example of spinach is quite telling because even after the price drop, its sale is not rising. That must be because people are simultaneously having to spend more on other essential items like wheat, rice and pulses amid inflation, said economist Arun Kumar. 

Usually, during inflation prices of basic commodities go up and you don’t have any savings, you have to cut down on the consumption bundle, he added. “Cereals and energy for cooking—these are most essential at such a time. Vegetables are treated as not so essential when the demand for most essential commodities are facing a significant hike as well.”

The regular visitors of the mandis are staying away due to the unbearable heatwave conditions in the capital, said sellers. A large share of the buyers at present are retail vegetable vendors, vegetable brokers and rickshaw pullers who sell vegetables at night. Also, those who supply fruits and vegetables to other states are among the customers. 

Apart from the lack of vegetable supply and reasons like hike in fuel and transportation charges owing to an ongoing global crisis, most retail and wholesale sellers at the mandi dubbed the constant decrease in purchasing capacity of people as a factor. 

Kumar concurred: When one speaks of economic crisis, it will also include employment, investment and growth getting affected.  Because the unorganised sector got hit very hard, there was a lot of unemployment, loss of income — as they form 94 per cent of the country’s workforce.

This was referred to the continuing adverse impact on employment in India’s unorganised sector ever since the pandemic-induced lockdowns in 2020. 

Kumar added: 

If such a huge percentage of the country’s workforce loses employment, obviously demand for certain commodities will fall and add to the inflation. With this, people’s income is less and how much the income can buy is less (owing to the price rise and constrained supplies).

“The peak pandemic months and its impact on the economy had hit our pockets so badly that we lost our savings and purchasing capacity for the coming years, said A Das, a vendor who buys vegetables like garlic (whose price has stayed constant in the last few months) from the mandi.

We can afford to buy very less from the mandi and the takers for our vegetables in the market are rapidly declining amid inflation, he added.

The Russian invasion of Ukraine continues to affect food security, constraining the global supply chain and causing rocketing of food prices. “The inflation India is facing is partly global and partly internal as our indirect taxes on fuel are very high,” said Kumar. So it is very inflationary in nature, he added. 

“The war aggravated the crisis but even before it started, we were facing stagflation,” the expert said.

Food Price Index averaged 140.7 points in February 2022, up 3.9 per cent from January, 20.7 per cent a year earlier and 3.1 points higher than February 2011. The Index tracks monthly changes in the international prices of commonly-traded food commodities.

“So, economic growth will slow down considering the sense of the economic crisis in India. Therefore, investment will slow down further, affecting growth and employment generation,” according to Kumar. 

Untimely, excess heat, crops were damaged and tomato cultivation had suffered in various parts of the country, hitting supplies, said Anil Malhotra of Tamatar Traders’ Association at Azadpur mandi. 

“Until April, we were getting most of the tomato supply from Jhirka in Haryana, Dadri district, Uttar Pradesh and Ahmedabad, Gujarat,” he said. 

Owing to crop damage, there was less supply from Rajasthan’s Chamu and Jaipur this year, Malhotra added. “For 15 days, tomato supplies from Rajasthan to Delhi have completely stopped.” 

Most of the tomatoes being produced in UP’s Amroha and Badaun are now going to Odisha, Kolkata and Bangalore, which severely lack supplies and are ready to even pay up to Rs 1,500 per crate of tomato, he added. The highest rate of tomatoes at Azadpur mandi is Rs 800 per crate, according to traders. 

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