NEWS

The laws of supply and demand

Over the past couple of weeks the price of tomatoes has inexplicably shot sky high, particularly for August, a time when they are usually very cheap. According to Costas Hondroulis, president of the Panhellenic Federation of Fruit and Vegetable Vendors, these products more than any other follow the laws of supply and demand. «Many products are selling at low prices, very few are expensive,» he claimed. High temperatures have affected the tomato crop, bringing production quantities down during a season when many farms do not grow them precisely because of the customarily low prices at this time of year. Therefore low supplies and high demand have meant high prices. When tomatoes are being sold for 1 euro per kilo in the retail market, the price in the central vegetable market at Rendi is 1.20 euros; of that 95 euro cents go to the producers, who see it as a «fair» price that compensates them for the previous months when prices were too low to cover costs. «In winter, when north winds are blowing, very few tomatoes are grown,» said Christos Malios, president of the Iraklion Farmers’ Cooperative. «If we have a south wind for two weeks, then they ripen faster and there is a glut, so prices fall, even in winter.» Christmas bargains Hondroulis said that last Christmas, the price of tomatoes in the Rendi market was just 20 cents because the entire crop ripened at once. «All the producers had arranged to have their crops on the market to take advantage of the usually higher prices then, but as a result there was a glut in the market and the price fell. Naturally, the farmers didn’t even cover costs,» he said. Apart from all the other variables governing prices of fruit and vegetables, quality is also a major consideration. Naturally, not all tomatoes are of the same quality and therefore are not sold at the same price; this often accounts for the «huge» discrepancy in price between the farm and the retail store. «At my store at the moment I have grapes that cost me 50 cents and others 1.20 euros. The former I sell to the customer for 90 cents and the latter for 1.80 euros,» Hondroulis said. Grapes the farmer sells for 30 cents, meanwhile, are those rejected from the export crop. As a result, when the consumer compares prices, he or she should also compare quality. All relative If a person has a low income, naturally everything seems expensive. But the reality remains – all those whose hands touch a product have to be paid for it. The more hands that a product passes through, the more it will cost the consumer. Simply put, tomatoes bought from a producer are the cheapest of all. Still, a product can be called «expensive» not because we can’t afford it but because its sale price is much higher than the cost of the producing, transporting and packaging it would warrant.