Tamil Nadu

Up, up and away

Tuvar dal — a staple pulse in South Indian kitchens — is selling at Rs. 10 a kg more than last year; vegetables, especially onions and tomatoes, were also ruling high, almost double, on the wholesale market on Monday.

High wholesale prices almost automatically translate into higher retail prices; it’s no wonder consumers in Chennai are feeling the pinch.

The wholesale price of tuvar dal has shot up by a massive Rs.1,000 for a bag of 100 kg over the last 12 months. Traders say the dal, which sold at Rs. 2,800 last year now trades at Rs. 3,800 now; other dals have also seen a rise of Rs. 500-700 per 100 kg.

The wholesale price of tomatoes was Rs. 18 – 20 on Monday. On April 21, 2007 — exactly one year ago — it was just Rs. 4 per kg. Some of that glaring difference can be explained by the heavy and unseasonal rainfall last month, but the price highlights a trend of increased vegetable prices this year.

Sambar onions were double last year’s price at Rs. 20 per kg. However, the wholesale price of potatoes, which are sourced from Maharashtra, have remained fairly stable at Rs. 7 – 8 per kg and are actually lower than last year’s price.

Wheat prices have risen by Rs. 300 per 100 kg; however the price of channa dal has remained stable.

Wholesalers say the rising costs of transport, storage and fertiliser, clubbed with unseasonal rainfall and heavy procurement by government and retail giants have pushed up prices.

At the Koyambedu vegetable market, wholesale vendors say prices of some vegetables were higher than usual this summer, mainly because crops were affected by the unexpected rainfall in March. The hike in fertilizer and fuel prices had also contributed to increased input costs for farmers, said V.R. Soundararajan, a leading wholesale merchant.

G.D. Rajasekharan, another top vendor at the Koyambedu market, said the price of jute bags used to carry vegetables had also gone up from Rs. 8-12 to Rs. 12-20.

But it’s not the wholesalers who are affected.

“It’s the common man who is feeling the pinch,” said Mr. Soundararajan. “Our sales haven’t been affected.”

It’s the same story in Georgetown, where grain merchants say they have been passing on the rising costs, and their business has not been affected either.

Grain merchants blame the government’s actions for the price rise. “Over the last month, the permit system has been brought back in Andhra Pradesh, from where Chennai gets a lot of its raw rice,” said rice dealer Amara Visweswara Rao.

“Licensed dealers are only allowed to sell one lorry load in the open market against three lorry loads of rice for the government.”

With the government tightening checks on licensed dealers, arrivals in the city have fallen from 150 ten-tonne lorries per day to less than 50 lorries per day.

The government’s rate for paddy procurement has also gone up, leading to an increase in the wholesale price from Rs 13 to 14 per kg for new Sona rice a year ago, to Rs. 17-17.50 now. However, Mr. Rao feels that once the AP government completes procurement for its special schemes, the price is bound to decline.

Increased transport costs have also pushed up the price of rice by at least one rupee per kg, he said. The rise in fuel rates has also impacted on the price of pulses.

Others such as S. Chandresan, a dealer in pulses, say that retail giants such as JK and Reliance are responsible for the price rise. “They are buying up 75 per cent of the stock and keeping it in their godowns … If a 250-tonne ceiling is slapped on them, it will bring down the price of dals,” he says.

Farmers have also increased their storage capacity and are able to command higher rates, he says.

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