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Hotter chillies, tangier tomatoes

By Sunitha Natti

ExpressBuzz (Indian Express), January 1, 2010

As the New Year celebrations wear out sooner or later bringing to the fore the harsh realities confronting the society today, the first thing that is likely to hit the denizens hard is the food inflation that is rising sharply.

Even as political unrest continues in the State, no one seems bothered about the spiralling food prices, except the common man on either side of the divide.

As a result of frequent bandhs, prices of essential edibles such as vegetables and fruits are hitting the roof.

Sample this: Tomatoes in both neighbourhood kirana stores and organised retail outlets — including Reliance Retail’s Fresh, Aditya Birla’s More, Big Bazaar, Heritage Retail’s @Fresh, Spar and Spencer’s Retail — costed Rs 15 per kg on Tuesday but increased to Rs 17 per kg on Thursday. Similarly, prices of onions and green chilli spiked from Rs 25.50 per kg to Rs 27 and Rs 20 per kg to Rs 21 respectively in just two days.

“Because of bandhs, frequency of trucks and lorries transporting vegetables from farms to mandis and outlets had come down. As a result of inadequate supply of some vegetables, increase in prices is only natural,” a senior official from More told Expresso.

While most retail chains do have robust inventory management and cold-storage facilities that can preserve vegetables for seven to ten days, due to continuing agitations, which began at the end of November, retailers feel that there is an impact on the overall supply-chain and distribution network.

“Typically, vegetable and fruit prices are fixed based on a combination of factors such as production, supply, demand, transportation and storage costs. Even if any of the factors gets disturbed, prices shoot up,” said Devangshu Dutta, CEO, Third Eyesight, a Delhi-based consulting firm focused on retail and consumer products.

Interestingly, some of the organised outlets, in a desperate bid not to lose customers, are selling raw tomatoes and overripe cucumbers at reduced prices. “Retail outlets dealing with perishables are severely hit due to the ongoing political crisis in the State. It causes customer inconvenience besides posting losses,” said K S Venugopal, Chief Executive (customer operations), Reliance Retail.

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