Agri Business

Prolonged monsoon pushes potato prices up 25%

Ayan Pramanik Kolkata | Updated on November 23, 2017 Published on October 20, 2013

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Prolonged monsoon leading to delay in sowing of early tuber varieties by 15-20 days, in major potato-growing States, have come as a boon to farmers in West Bengal.

According to Patit Paban De, Member of the West Bengal Cold Storage Association, farm-end price (net of storage expenses) of potatoes has moved up 25 per cent to Rs 600-650 a quintal on Friday, from Rs 460-480 in the first week of October.

As in mid-September farmers were earning Rs 440-460 a quintal against a production (and storage) cost of nearly Rs 500 a quintal, owing to excess stock arising out of over production.

West Bengal reported 12 per cent rise in potato production to nearly 98 lakh tonnes last season. The early variety hits the market in December-January. Major production (primarily Jyoti) comes in March.

Nearly 40 per cent of State’s production is used in meeting majority of demands of eight North Eastern States, Odisha, Andhra Pradesh, Jharkhand and Bihar. The State also imports limited quantities of early tuber from Punjab and UP.

Though he doesn’t rule out possibilities of prices coming down to some extent, De is hopeful that overall prices will remain firm for the rest of the season ending in December.

Trend reversal

The price movement was unexpected. As in September, De was pessimistic of upward movement in prices. Over 400 cold storages in Bengal, the second largest potato-growing State, had nearly 1.5 lakh tonnes excess stock compared with last year. The situation was reportedly even worse in UP, the biggest producer.

“Potato farmers should end up in heavy losses this year,” he told Business Line on September 13.

The scenario improved slightly in the first week of October, as prices moved up Rs 20 a quintal, as traders were stockpiling to meet demands during the 10-day-long Puja holidays. But, De was still not convinced of any major price rise potential.

But, the entire outlook changed this week. To start with, cold storages report reduction in stock to last year’s level. De attributes this (release of 1.5 lakh tonnes additional stock) to distress sale by farmers before the Puja. Meanwhile, news started pouring in — not merely from Bengal, but also from UP and Punjab — about delay in sowing of early varieties fuelling expectation of a demand gap.

Demand gap

Considering, 8 lakh tonnes of monthly trade of potatoes in Bengal (to meet own consumption and of other States), sowing may result approximately 4-5 lakh tonnes additional demand for stored tuber.

De, who is more concerned about farmers, argues that the gap is too high when measured against 24-25 lakh tonnes of stock in cold storages, which are scheduled to go on annual maintenance closure in January.

The indication is, a section of farmers, who could hold on to stock till now, may expect to end the year in profit.

Published on October 20, 2013
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