Tangible Economics on Tomatoes

Love for Tomato is never lost. Also called Love Apple, the Tomato indeed is a berry fruit but is legally vegetable. A great deal of economics, politics, family finances, and trade happen around Tomatoes. ?Presently, the prices of Tomatoes soared and remained higher in many regions around the World. The situation invokes response of economists.

Of the global Tomato production, about 30% is consumed by China, about 10% by US, and about 7.5% by India. Interestingly, even the per capita consumption of these three countries has same trend with Chinese about 43 kgs per person per annum, US 13.5 kgs, and Indians 10 kgs.

Turkey and Egypt are the other nations consuming following higher shares of Tomato. Thus, about 80% of global tomato is consumed by these 5 nations. There are hardly any countries that would not use Tomatoes at all, except Brunei and few countries in Central Africa.

The prices of Tomatoes have another interesting detail. Switzerland has the average highest price for per kilogram of Tomatoes at $6.5. New Zealand at $6, South Korea at $5.5, Germany $5, and countries such as US, Japan, Australia, Austria, Norway, etc., at $4.

All the countries have Tomatoes production, but the volumes vary as per their climatic conditions. Iceland does not have Tomato production due to its constant ice formation. Saudi Arabia and Kuwait hardly have any Tomato production due to their soil, heat, and water conditions.

Annually, the global Tomato production is about 200 million metric tons. China, again, ranks first in Tomato production with 36% share. India is second but with a distant share of 11%, Turkey with 7%, US with 6%, Egypt and Italy 3.5% each, and Iran, Spain, Mexico, and Brazil with 2% each. About 60% of production is from four countries which also happen to be the top consuming countries. Again, of the global 10,000 varieties of Tomatoes, China ranks first with thousands of varieties. US with 4,000 varieties, and India with many varieties stand in subsequent order. On quality aspect, it is Italy which is the leader with highest quality Tomatoes. Spain, US, Mexico, and Turkey rank in subsequent order.

The global trade of Tomatoes exports and imports is of $10 billion. Mexico has highest export share of 26%, Netherlands 17%, Spain 10%, Morocco 10%, and France 7%. Thus, 5 countries collectively export 70% of the total global Tomatoes exports.

Regardless of production, consumption, and export volumes, there is no country which does not consume Tomato, either as a fruit or otherwise. In fact, Tomato is a fruit and not a vegetable. But the usage of Tomato as a fruit is confined only to few remote rural areas and Tomato has come a long way as a popular vegetable.

The case of India is peculiar. Rarely would an Indian family have its meal without Tomato as an ingredient in their cooked meals. India ranks top in consuming Tomatoes in many forms. They include, Tomato fry, Tomato curry, Tomato chutney, Tomato Dal, Tomato sambar, Tomato rasam, Tomato pickle, Tomato rice, Tomato Ketchup, Tomato masala, etc. The forms of cooking Tomatoes are many such as stewing, roasting, blending, and grinding. In many cases, Tomato is also an alternative of tamarind and lemon. ?

India has another connect to Tomatoes. Many Indian movies have fun with Tomatoes. Either throwing them, cooking them, or with other humorous references. Films such as Rang De Basanti, Ghar Ghar Mein Diwali, Pyar Ka Punchnama, Tanu Weds Manu etc have used Tomatoes as a part of their story, scenes to connect to the audience. In fact, in the movie Chakdey India, characters used Tomatoes for discussing about teamwork and strategy in sports.

Turning to the prices, Tomatoes are one of the top items in India to see extremely volatile prices in few occasions, although in most of the times the prices remain reasonable. Same is the scenario now with Tomato prices touching Rs. 100 per kilo gram in many places across India. The price of Tomatoes per kilo gram touched higher in July 2023 at Rs. 250, and in July 2024 Rs. 100, and now again in October 2024 Rs. 100. Whenever the prices soar higher, Tomatoes become active discussion point in politics, economics, families, movies, and news. Even the Reserve Bank of India, in its Monetary Policy Meeting that concluded on 9th October 2024 cited higher prices of Tomato as one of the reasons for continuing than reducing the policy interest rates. Concerns of RBI are true and until some solutions could be found, situations would remain helpless.

Disclaimer: Dr. Kishore Nuthalapati is an Economist, and is the CFO of BEKEM Infra Projects Pvt Ltd, Hyderabad, India. Views are his personal and do not reflect those of any of the organizations he is or was associated with.

Acknowledgements: The author acknowledges his association with CropWings, an agritech startup doing wonders in crop science directly in the fields. The author is thankful to Malaxmi Group and Mr. Yarlagadda Harish Chandra Prasad with whose interactions the author got to know about the importance of Tomatoes. The author also thanks Dr. Surinder Kumar Tikkoo who is considered as the Father of Tomatoes in India for his 60 years of research and contribution to Tomatoes in India, and has shared great amount of knowledge with the author on Tomatoes.