Agri Business

Potato prices crash 80% from November peak

Subramani Ra Mancombu Chennai | Updated on February 18, 2021

Spud becomes cheaper as higher arrivals hit the market

Potato prices have crashed by about 80 per cent in various primary agricultural markets in major producer-States from a peak of ₹2,750-2,900 a quintal seen in November last year as arrivals have begun to flood the markets.

“Potato prices have fallen sharply to around ₹500 a quintal in markets such as Fatehabad due to higher production this year. Potato output is expected to be at least 20 per cent higher this year,” said Mahendra Swarup, President, Federation of Cold Storage Associations of India (FCAOI).

Prices in Uttar Pradesh agricultural produce marketing committee (APMC) mandis ruled between ₹550 and ₹670 a quintal.

In Punjab markets such as Jalandhar, prices ruled at ₹550 a quintal and in Bengal, they were quoted at ₹580-600. During the same time last year, prices ruled between ₹820 and ₹900.

The three States account for nearly 48 per cent of the total potato production in the country.

Higher inflow, output

Ministry of Agriculture and Farmers Welfare data showed that arrivals in these three States during February 1-17 have been provisionally estimated at 3.75 lakh tonnes against 3.18 lakh tonnes during the same period a year ago.

According to the Consumer Affairs ministry, prices of the kitchen staple in Delhi were ₹15 a kg on February 17 against ₹45 on November 30, while in Mumbai they were ₹33 (₹52).

“Currently, the potato being harvested is for direct consumption. These potatoes are hybrid varieties that cannot be stored,” said Patit Paban De, former president of West Bengal Cold Storage Association.

Paban de concurred with Swarup’s view on production likely to be 20 per cent higher this year. “In Uttar Pradesh, production could be 30 per cent higher,” he said.

Jaikishore Singh, a potato farmer in Mandoli village in Uttar Pradesh’s Chandauli district, feared if he could recover his cultivation costs.

“I bought seeds at ₹35 a kg and cultivated potato on eight hectares. Currently, I have people taking potato from my farm directly at ₹6-7 a kg but I am not sure if I can recover the costs,” he said.

Storage crisis

Swarup said growers are yet to start looking at the option of storing potatoes in cold storages. “Currently, the crop is being harvested in southern Uttar Pradesh. Cold storages will be in demand only when harvest begins in areas such as Agra. It will begin in another 10 days,” Swarup said.

Paban de said production is higher this year as the area under potato and productivity are higher.

“This year, there could be a problem in storing potatoes in warehouses. Farmers can salvage the situation only if demand increases from other parts of the country. Otherwise, we could be facing a storage space crisis,” he said.

Swarup and Paban De expect prices to recover a little once farmers turn to cold storages.

“But the fear is that the situation could get worse if farmers are not able to find space to store the potatoes. A clear picture will be available once the Bengal crop begins arriving in the first week of March,” Paban De said.

According to Paban De, most farmers would be affected once prices go below ₹600.

Besides paying a higher rate for seeds, labour costs are also reported to be high for growers this year.

Potato prices headed south as early as January since growers went in for early cultivation to take advantage of the higher prices in November, particularly in Bengal.

Potato prices spiked in November due to low production after unseasonal rainfall affected cultivation in 2019. Rains hit the crop in Karnataka and Maharashtra last year.

Higher consumption due to the Covid-19 lockdown also aided the price spike, according to traders.

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Published on February 17, 2021
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