RBI slices tomato inflation to find 5 interesting facts

economictimes.indiatimes.com:

inflation, the RBI will have to contend with pricey tomatoes. The price of tomatoes has risen dramatically in recent weeks, spurting above Rs 160 and even crossing Rs 200 in some parts of the country. McDonald's took tomatoes out of its food items in certain locations and many eateries as well as households started using purée instead of tomatoes.

In an article in the latest RBI bulletin, analysts warn that the spike in tomato prices is a serious concern. «Spillovers from tomato price spikes to prices of other commodities and unhinging inflation expectations remain a major concern. Increasing amplitudes of price spells over the years calls for improving the supply chains to contain overall inflation volatility,» analysts said.

The article, which is part of the RBI's bulletin, however does not represent the views of the central bank. Analysts said India's fight against inflation is far from over as the spike in food prices has re-emphasized the need for monetary policy action as well as improvement in supply side management.Five interesting facts about tomato prices The recent spike in tomato prices on account of crop damage due to inclement weather and pest attacks in the major production belts has received widespread attention as it has taken a toll on households’ budgets, says the article on tomato prices in the RBI bulletin. It goes on to offer five interesting facts about tomato prices in India.

1. Historically, tomato prices have been an important contributor to volatility in overall inflation. Its volatility also gets transmitted to prices of other vegetables in both retail and wholesale markets.