What’s causing tomato prices to spike?

The tomato prices have surged in the domestic market due to an abrupt decline in supply. The daily supply at the Kalimati Fruits and Vegetables Market has dropped to 29-35 tons, down from 80-85 tons about a month and a half ago.

Tomato prices are currently hovering over Rs 100 per kg in the wholesale market, with retail prices reaching as high as Rs 200 per kg. According to the Kalimati Fruits and Vegetables Market Development Committee, tomato supplies in the market dwindled from 95 tons on June 17 to as low as 37 tons on Aug 8, marking a decline of more than 60 percent. Just two months ago, farmers were receiving less than Rs 2 per kg for tomatoes, causing traders to discard tomatoes on the streets as wholesale prices plummeted to as low as Rs 5 per kg.

However, the situation has now changed. Traders say that supply in the domestic market has dwindled due to increasing exports of tomato to India where prices have skyrocketed. Badri Lal Shrestha, a tomato farmer, explained that tomatoes are being exported to India through the Bhairahawa and Birgunj customs points, and some are even being sent through informal channels. An official from the Birgunj Customs Office acknowledged that tomatoes were being exported to India but in negligible quantities. Exports have been affected by heavy rains in recent days, according to the official.

Tomatoes are not commonly exported to India. The official said traders in neighboring Indian markets have turned to Nepali tomatoes due to higher prices there. Binaya Shrestha, the information officer of the Kalimati Fruits and Vegetables Market Development Committee, attributed the rise in tomato prices to the low supply. “While the daily demand in the market is around 60-65 tons, we are receiving only about 35 tons. This has created a mismatch between demand and supply which is reflected in market prices,” he added.

Shrestha said supply fell to 28 tons—one of the lowest in recent years—on Wednesday. “As tomato prices have also increased in India, farmers in the Tarai region, who would usually send their produce to Kathmandu, are now sending tomatoes to India. This has affected supplies in our market,” he added. The peak season for tomato production in Nepal is typically Dec-Jan. Additionally, farmers who cultivate tomatoes in tunnel farms around Kathmandu and nearby areas also harvest tomatoes in May-June. This caused prices to drop significantly in June. Although tomatoes are fetching good prices now, tomatoes in tunnel farms aren’t ready for harvest yet.