Wednesday June 29, 2022

Huge disparity in tomato prices exposes supply chain flaws

January 18, 2022
Huge disparity in tomato prices exposes supply chain flaws

LAHORE: Huge disparity in tomato prices has laid bare colossally mismanaged supply chain as well as distortion in rate fixation by the authorities, sources said on Monday.

Difference in tomato prices in the two biggest producer and consumer provinces is humongous. At one hand, growers in Sindh are selling tomato at throwaway price of Rs5-10 per kg, consumers on the other are buying it at Rs60-80 per kg in the urban centres of Punjab.

The downward trend in the prices of tomatoes, which are an indispensable part of most of dishes in the country, has been seen in Sindh province since early January. Muzzammil Aslam, Spokesperson to Finance Minister, also noted on January 05, 2022, the price of tomato has fallen to Rs35 at retail in Karachi, the biggest consumer center of the country.

At that point of time, official rate of tomatoes set by the district administration in Lahore was almost the same. However, as harvesting of tomatoes started gaining pace in Sindh and its price started crashing, an unusual upward trend emerged in major cities of Punjab province.

After a brief respite for consumers in early days of the new year, when tomatoes came down to Rs35 per kg, the official rate nowadays stands at around Rs55 per kg in Lahore and a few other major cities. Even within the province of Punjab, tomato price wildly ranges between Rs19 per kg in Dera Ghazi Khan and Rs47.50 per kg in Lahore, indicating logistic flaws and supply chain mismanagement. Consumers are clueless as to why tomatoes are being sold in the wholesale markets of Rahim Yar Khan, Dera Ghazi Khan, Bahawalpur, Multan, Sargodha at around Rs20-30 per kg, while prices are hovering around Rs40-60 in Lahore, Faisalabad, Gujranwala, and Okara. This price crash phenomenon, haunting growers in Sindh now, was seen last year too, but from March onwards. To much of their dismay, free fall of tomato prices has been seen much earlier this year.

Market insiders were of the view that supply chain management is not being taken care of by any dedicated ministry at federal level. Sindh farmers could have saved from the price crash, while central Punjab consumers from the price hike.

Sources said a ministry of commodity prices, logistics & supply chain management should be set up to ensure the most efficient and secure movement of goods for creating a win-win situation for producers as well as consumers.

The very basic aim of the proposed ministry should be to ensure competitiveness of the whole supply chain, while shielding consumers from price shocks by employing sustainable management practices at critical part of the country value chain, the market insiders added. Otherwise, the sources said, the vicious cycle involving losses to farmers due to abundance and suffering faced by consumers because of short supply and resultant price hikes would continue to bite, stoking inflation in urban centers at one hand and increasing poverty in rural areas.