Tomato price shock hits Indian restaurants, cheaper puree sales boom

Tomato costs have increased by almost 500%, prompting many Indian restaurants to reduce their use of tomatoes in their most popular dishes, while consumer businesses rush to meet the surging demand for their more affordable purees.

Tomatoes are a staple ingredient in Indian cuisine, but the recent monsoon rains have caused supply disruptions at a time of year when production is generally low. As a result, the government has organised mobile vans for subsidised sales.

Higher food prices are having a wider impact across the business, and are contributing to headline inflation rates that are beyond the central bank's medium-term target. This is why many McDonald's and Subway locations have removed tomatoes from their menus, claiming quality difficulties.

Mother Dairy, a New Delhi-based retailer of milk and vegetables, reported a 300% increase in sales of tomato puree over the previous 15 days. Puree output at Indian consumer goods company Dabur has been increased to suit rising demand.

BigBasket, Tata's online shopping platform, saw a 175% increase in puree sales in early July, with senior executive Seshu Kumar reporting that customers were purchasing 50% less kilogrammes of fresh tomatoes each purchase.

Amazon reported a fivefold increase in demand for tomato puree and a thirtypercent increase in ketchup sales over the past month.

Tomato paste accounts for about 40% of the weight of a normal puree pack, with the remaining 60% being water.Wednesday in New Delhi, tomato prices were 199 Indian rupees a kilogramme, up from about 30 Indian rupees in April. The cost of puree has been the same so far.

As the price of tomatoes in India rose above $1.22 per kilogramme, I began experimenting with tomato ketchup in Indian gravies. Pravieen Sridhar, 34, who owns a washing service in Chennai, said that not everyone in his family was a fan.

According to Google Trends, interest in "tomato puree" and "tomato puree 1kg price" has reached an all-time high in India during the past several weeks.

Other vegetable costs have also increased as a result of crop damage and transportation difficulties brought on by the rain. The annual retail inflation rate in India jumped to 4.81 percent in June due to rising food costs, ending four months of decline and adding to speculation that the central bank will maintain its current interest rate policy until at least the middle of 2024.

In India, where the average monthly per capita income is projected to be around $200 in 2022-2023, vegetables are a politically contentious item. Onion price increases, another staple in Indian food, have toppled several state governments in the country's history.

Large and small food retailers alike are feeling the pinch of sky-high tomato costs. Birju, a vendor in a New Delhi business sector, said he now only uses the pricey ingredient as a garnish, and only when customers ask for it. Birju serves an inexpensive bread-and-pea street meal that usually comes with tomatoes.

He pointed to a single tomato on his cart while he cooked on a sweltering afternoon and added, "Customers understand I am not using it because I haven't increased prices."

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The fresh tomato use has decreased while the use of purees has increased, according to Pradeep Shetty of the Hotel and Restaurant Association of Western India.

To paraphrase one chef, "chefs are also trying to find ways to bring the sourness of tomatoes through other agents like tamarind."

The proprietor of a popular restaurant in south Delhi, known for his tomato-based cottage cheese gravies, has raised the price of his dishes by 12 percent.

He warned that new pricing considerations might be necessary if interest rates remained unchanged.