Tomato glut causes massive price drop

Price of tomatoes in key markets across the country dropped significantly in the week to September 3, according to Esoko market watchers. Kumasi Central market and the Agbogbloshie markets witnessed significant tomato price drop in the week, but the Kumasi Central market had the biggest downward trend. Whereas the Agbogbloshie market witnessed 8 and 7 percentage price drop, over the closing price of last week, on wholesale and retail prices respectively, the Kumasi Central market had a massive 55 and 36 per cent price drop on wholesale and retail prices respectively.
According to Esoko market watchers, the trend is however expected. “Agricultural commodities unfortunately are subject to this kind of seasonal price swings. The pain for farmers is that they earn less when they increase production, especially for those who plant perishable agricultural commodities, such as tomatoes, without an extensive marketing plan. In order for the market to accommodate the excess supply, it is natural that the price has to fall. This fall, however, often comes as a shock to some farmers. Our monitored positions show that tomato farmers are most of the time up against the tide, in the harvesting period. There have been reports in the past of some farmers committing suicide because of the poor market price of their produce in the harvesting period. It is indeed a sad situation for some of these farmers, in this kind of situation”, Esoko market analysts stressed.
Esoko provides farmers the opportunity to market their produce over the web using their mobile phones to post offers to sell. By providing farmers with market information on prices from a number of selected markets across the country, farmers are able to connect and trade with traders beyond their geographic areas or the markets they normally trade in.
“It is our sincere hope that we can help and should be able to help improve agricultural value chains with our services, like the SMS alerts, and the situation of tomato farmers is of a concern to us. By providing farmers with market information we are able to link them properly to the market. We have demonstrated that with the right market information farmers are able to improve on their livelihoods through the increased income they receive by moving their produce around to markets where the price is favourable”, Esoko analysts explained.
In the broader market performance, most of the commodities covered showed little price movements, either upward or downwards- with the above commodities apart.
It must also be pointed out that wheat prices also witnessed some significant drop. Esoko has been monitoring the price of wheat on the local market closely because of the recent upwards price swing in the international market. But, wheat prices in Ghana have been reducing in most of the key market s monitored by Esoko, contrary to what is happening in some markets internationally.
In the Kumasi Central market again, the price of wheat dropped by 29 and 31 per cent in the week to September 3, in wholesale and retail trading respectively.
Generally, the Kumasi Central market seems to have much lower prices for some key commodities because of the high volume of market activity for such produce. Because the market serves as the nerve centre for some market traders and farmers from the Northern, Upper East, Upper West and the Brong Ahafo regions, prices are forced down in most cases, to accommodate the often low demand.
The drop in market prices in the week ended September 3 led to a drop in the Esoko Ghana Commodity Index- Retail (EGCI-R) to 2030 points and the wholesale value, EGCI-W dropping to 840 points.

Generally, Ghana seems to have strengthened its national food security initiatives with improved crop yield over the past two years.
According to official figures, rice production increased by 30 percent in 2009 and is targeted to reach a 50 percent production increase in 2010. There is also a 10 percent increase in the production of tubers such as cassava.