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Low production, high logistics also add to lemon inflation

Reducing mismatch between supply and demand lies in boosting storage capacity

All over India, lemon prices are squeezing household budgets. Reportedly, the supply of lemons has fallen due to a decline in overall production. Lemon orchards are very sensitive to excess moisture and the supplies took a hit after exceptionally heavy rains in September and October last year.

Chances of a quick correction in prices are low because the next crop will come in only by October. From the policymaking perspective, however, it would be a mistake to view this spike in lemon prices in isolation. It would be equally erroneous to imagine that the solution lies in boosting production alone.

High food inflation as well as wild fluctuation in food prices are fairly chronic events in India. The commodities keep changing through the year but the phenomenon remains the same. Breaking the cycle of supply gluts and shortages will benefit both consumers and producers. The key lies in boosting India’s storage capacity as it can reduce the frequent mismatch between supply and demand.


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