The Hindu Business Line : Cold weather pushes up MCX potato futures prices

After a steep rally last month, potato futures on MCX are expected to consolidate at the current level with a possibility of a minor upside in the near to medium term.

Cold weather in the Northern states has pushed up potato futures on MCX by Rs 150 per quintal in January on concerns of crop damage.

“Prices are likely to come under pressure during peak arrivals in February. A clear trend will emerge mid-February,” said Mr Harish Galipalli, Head of research, Karvy Commodities.

According to trade estimates, about 10-15 per cent of the crop has been damaged due to adverse weather conditions, however, final estimates of crop damage is yet to come.

Earlier, the National Horticultural Research and Development Foundation estimated potato output to increase by 11 per cent to 30 million tonnes from 27 mt last year. In West Bengal, output is estimated at 70 lakh tonnes this season.

Spot prices in Agra are quoting at Rs 400-420 per quintal. Last one month, potato for March delivery on MCX has risen 5 per cent to Rs 595 per quintal on Friday.

Like other agri commodities, potato also follow seasonal pattern as far as prices are concerned.

The wholesale price index of potato peaks in October and November due to decline in arrivals. From mid-December prices falls as stockist off load old stock in the wake of fresh arrivals in February. After March, prices gain momentum till October.

India ranks third in potato production in the world. A 34 per cent of the total production comes from Uttar Pradesh followed by West Bengal 24 per cent and Bihar 19 per cent.

These three States account for 77 per cent of total domestic production. Punjab, Gujarat, Madhya Pradesh and Karnataka also chip in with a small quantity. Though Uttar Pradesh has the largest potato production, Gujarat tops in yield.

The average yield per hectare in India is quite low at 18 tonnes.

In 2001-02, the productivity was high at nearly 20 tonnes due to use of high yielding varieties and favourable weather conditions. Of late, the yield has come down to an average of 17 tonnes.

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