Rains, Not GST, Behind Spike In Vegetable Prices
Vegetable prices rose by more than 50 percent over the previous week after supplies were hit by heavy rain & fog.
Vegetable prices rose by more than 50 percent over the previous week after supplies were hit by heavy rain and fog.
The prices may go up further as the Goods and Services Tax will increase transportation costs, said Ishwar Jadhav, a vegetable seller at Agricultural Produce Market Committee in Vashi. This will be a double-whammy for consumers who are already bearing the brunt of supply shortage, he said.
Some traders at the Vashi market BloombergQuint spoke to said the exact impact of GST can be gauged only after a week. “How can I tell you now? Let the GST stock come in first. Right now, the supplies are low due to rains,” said Maruti Mallale, owner of Mahesh Vegetable Company at Vashi.
The new stock of almonds, imported raisins, spices, cranberries, figs and walnuts is expected to cost at least 6 percent more as the effective rate has doubled to 12 percent under GST, said Nikunj Kedia, Preeti Enterprises, a trader at the Vashi spice market.
Tax on cashews and raisins produced in India, however, is 5 percent.
Branded and packaged jams, jellies and pickles are also in the 12 percent slab. The tax hike will be absorbed by companies and there won’t be much change in prices, said Manilal Gala, Waghad Marketing, another trader at the Vashi spice market.
Wholesale prices have risen marginally in New Delhi, again due to supply shortage.
It has nothing to do with GST. The rains have caused delays in delivery of fruits and vegetables.Rajendra Sharma, Secretary, Agricultural Produce Market Committee, Azadpur
The produce is lying in storage or in transit, which has increased prices a rupee or two per kilo, he said. “This happens every year and there is nothing new about it.”
(This story was originally published in BloombergQuint)
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