Tomato price expected to decrease by 75% in December

Barring any unforeseen circumstances, the prices of tomatoes which currently hover around N30, 000 is expected to fall by about 75percent to N7, 000 per 50kg basket by early December, according to experts in the industry.

According to these industry watchers, the drop in prices will however start by August ending till it falls to about N7, 000 per 50kg basket in first week of December. But this prediction of an end to the scarcity is based more on weather forecast rather than deployment of appropriate technologies.

For instance, Southwest farmers expect that in August, there would be many sunshine days after the heavy rains of June and July, so tomatoes in the field would start ripening and would be available abundantly at the end of August. 

Abiodun Oyelekan, head, Lagos Fadama apex body said, “Tomatoes grown in the Southwest will be available for sale in the market by August ending and this will start reducing the prices significantly.”

To reach the expected lowest price of N7, 000 this year, Usman Baba, a leading commodities dealer in Mile 12 market, Lagos explained, “The current tomato scarcity will end by November/December this year when tomatoes grown in the north will be in abundant supply. But the prices will not return to N5,000 which was the price it was sold early this year. The 50kg basket will most likely be sold for N7,000 by early December.”

Every year within the last 10 years due to climate change, the prices of tomatoes go up astronomically around May to August. In 2014, prices of tomatoes rose from lowest N3, 000 to highest N17, 000. But this year, prices of tomatoes rose by 90percent, from lowest N3,000/N5,000 to highest of N30,000 and more between  May and now. This is the most astronomical in recent years and it is mainly due to delay in rainfall, and the fuel scarcity which was prevalent at that period and poor road infrastructure.

However, some industry watchers have noted that the CBN’s recent policy withholding foreign exchange for importation of 41 items including tomato pastes could impact on this yearly and expected fall in prices.

According to the analysts, without curbing wastages resulting in loss of 50 percent of the 1.6 million tons of tomatoes produced annually, provision of efficient pest/disease control measures, nationwide irrigation facilities/operation and decrease in cost of funds to boost productive capacities of farmers/processors and other infrastructural provision, demand for locally produced tomatoes and tomato pastes would keep rising yearly. Demand for tomatoes is on the rise as its utilisation in making of fresh juices is on the rise, in addition to its heavy consumption by households in Nigeria and industrial usage. Without a corresponding increasing in supply, this will lead to high prices towards the end of the year. This could then perpetuate the current high prices of tomatoes.

Highlighting possible solutions, Johnson Chukwu, managing director, Cowry Assets said, “When a country wants to stimulate production, it has to reduce cost of funds.” Chukwu also highlighted the needs for speedy development of the light rail system between north and south and location of processing plants close to producing areas as well as massive irrigation and other infrastructure provision such as power and good roads.

He also pointed out the possibility of stimulating productive capacity by rewarding investors with adequate tomato production facilities locally with opportunities to import over a period of time until their local productive capacities can meet up with demand. He stated, “This was adopted in the cement industry. Those who have facilities for local production were allowed to import for a period while the government progressively increased duty on imported cement.”

According to the United Nations Food and Agriculture (FAO) statistics, Nigeria which produces 1.6 million tons of tomatoes ranks 15th in world production with 272,000 hectares under production, making it the fourth globally in terms of land size put under tomato cultivation but 160th in terms of output as it produces 5. 75 tons per hectare, which is extremely low when compared to the United States that produces 300 tons per hectare in a year.

OLUYINKA ALAWODE