The Hindu Business Line : MCX to launch forward contracts in potato

Way to grow
This is the first time forward contracts has been launched in potato
Will help achieve better price discovery across the country

Kolkata , March 5

Multi-Commodity Exchange of India (MCX) will roll out forward contracts in potato on March 9 and to begin with, the future contracts will be linked to the `3797' variety based on spot market prices of Agra mandi in Uttar Pradesh.

According to sources, the Agra mandi is now recording a daily turnover of between Rs 60 crore and Rs 70 crore on potatoes.

Uttar Pradesh is the largest potato producing State in the country with the 3797 variety available mostly in Central and Western UP. The State has witnessed a bumper crop in last few seasons resulting in a crash in prices. To help achieve better price discovery, the State Government recently decided to take up exports, mainly to neighbouring countries.

To add more varieties

MCX is reportedly having plans to launch contracts on a few more prominent potato varieties available in other leading producing States, including West Bengal, Haryana, Bihar and Madhya Pradesh.

According to the broking community, this was the first time that any national exchange will be making a foray into this perishable commodity.

Stating that the forward contracts will help discover better prices for potatoes across the country, sources said that the proposed venture had already evoked interest in the potato-processing sector, including some prominent national and international players.

Higher output seen

According to available estimates, potato production is expected to be higher at 24.65 million tonnes this fiscal against 24.15 in the previous year.

While kharif production has been pegged at 1.33 mt, rabi output could rise to 23.3 mt. This is against last year's output of 1.4 mt during kharif and 22.74 mt during rabi.

Gains are expected mainly on rise in area during rabi with coverage up at 12.31 lakh hectares against 11.99 l. ha last year. Kharif coverage was 97,430 hectares against 1.04 l.ha last year.

Potato prices are currently ruling between Rs 10 and Rs 12 a kg in retail outlets nationally against Rs 3-5 a kg during the same time last year.