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Farmers agitation: Fresh grocery items, eating out may get costlier

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Fresh grocery products and eating out may cost more even as a countrywide farmer agitation begins to impact supplies of fresh farm produce, leading to a spike in prices in local markets, grocery retailers and restaurant firms have said.

E-commerce firms such as BigBasket and Grofers said so far they have been following a discounting and consumer promotions strategy on fresh vegetables and fruits, but that could change if the farmer stir intensifies.

“We have a farmer connect and so are able to maintain and control prices,” said BigBasket’s fruits and vegetables head Vipul Mittal. “But if prices go up, we may have no choice but to react accordingly,” he said.

Several farmer outfits across the country on Friday started a joint 10-day protest across 22 states, demanding remunerative prices for their produce and farm loan waivers, among other demands. Many farmers have dumped their produce on roads as part of the protests, and supplies of vegetables, fruits and milk are curtailed in many parts of Punjab, Rajasthan and Madhya Pradesh. A national-level wholesaler said supplies are down 30-40% in the impacted markets.

BigBasket, the country’s biggest grocery e-tailer, would likely look at sourcing from other states, Mittal said. “Whoever has better sourcing grip will have better control on pricing,” he said.

Restaurant firms, too, expressed apprehension. “Any volatility in prices doesn’t change the menus overnight. But if it persists, then restaurants have to mitigate it by adjusting menu prices,” said Rahul Singh, president of National Restaurant Association of India.

Amit Burman, chairman, Lite Bite Foods, said the chain was looking at value and menu re-engineering. “Upfront price increases may not be the only solution. We are re-looking value pricing and portion sizes,” he said. Lite Bite’s restaurant brands include Punjab Grill and Street Foods.

The price hike would be on the back of a tough year for the casual dining sector, with at least 50 outlets downing shutters across brands on account of rollback of input tax credit, inflation and steep rentals hurting profitability.

Albinder Dhindsa, cofounder of online grocery startup Grofers, said the company has pre-arranged supplies coming from farmers and so far, barring some places in Rajasthan, there has been little impact of the farmers strike. “However, the impact is expected from tomorrow,” he said, adding that supplies of farm produce is expected to be hit in Delhi and surrounding areas as well.

Over the weekend, the weekly vegetable market near Noida’s City Centre was selling tomatoes and potatoes for Rs 30 a kilogram each. While Bigbasket is selling a kg of similar hybrid tomato for half the price, one kilogram of potato is being sold on Grofers for Rs 19, around 30% cheaper than the Noida market.

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