Extreme weather events like cyclones, heavy rainfall/floods, thunderstorms, hailstorms, and droughts often damage standing crops, causing supply shortages and spikes in vegetable prices in India. Such supply shocks push up food inflation and also increase food price volatility. This paper analyses the impact of such extreme weather events on the prices of three key vegetables, that is, tomatoes, onions and potatoes in India. It also tries to find out whether the inclusion of these weather events improves out-of-sample forecast performances. The paper concludes that these events have a significant impact on the prices of TOP and aids in forecast performance in the case of onions and potatoes. Therefore, monitoring the occurrence of such extreme weather events in important TOP-producing states can help in predicting future surges in prices of these vegetables and improve forecasting performance of food inflation in the short term.
