Potato prices likely to rule firm as weather plays truant

Your potato may pinch your pocket now, with domestic prices likely to rule firm as production this year has been estimated at least three million tonnes (mt) this season to June compared with last season.

According to the Ministry of Agriculture’s first estimate of horticulture production, potato production in the current crop year has been estimated at 53.60 mt against 56.17 mt last year. The production has been affected in West Bengal, Punjab and Haryana due to usual rains during November-December last year soon during sowing. The crop has also been affected by the heat wave prevailing across the country since March.

Soaring prices

But a section of the trade says States such as Bihar, Gujarat and Rajasthan which have a good amount of potatoes stored in cold storages could ensure that prices do not go up alarmingly.

West Bengal, the second-largest producing State, has registered a 23 per cent drop in production this year. Production of the tuber in the State is down at around 8.5 mt against 11 mt in 2021. “The crop is lower by 10-25 per cent in Punjab and Haryana too due to the impact of unseasonal rains,” said Rajesh Goyal, Honorary Secretary, Federation of Cold Storage Associations of India (FCSAI), which plays a key part in storing the spud.

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The wholesale price of common variety potato (Jyoti variety) has firmed up by nearly 57 per cent to  ₹22-24 a kg this year compared with  ₹14-16 a kg in the same period a year ago. In the Agra agricultural produce marketing committee yard in the largest producing state of Uttar Pradesh, potato prices ruled at  ₹1,020 a quintal on Monday, up  ₹200 year-on-year.

Prices were largely stable in Bengal last year as it witnessed a bumper crop with a 16 per cent rise in production compared with 9.5 mt in 2020.

According to Patit Paban De, Member, West Bengal Cold Storage Association, potatoes freshly cultivated from farms are usually consumed for the first three-to-four months of a year. After that, stored potatoes start making their way into the market. The price of potatoes released from cold storage is slightly higher than the farm potato price. For instance, in February this year, the price of potato was ruling at around  ₹12-13 a kg.

“There were untimely rains during the sowing period which led to rotting of some crops. Though re-cultivation was done on some parcels of land, it was not good enough to offset the loss.. The production is down by nearly 20-25 lakh tonnes this year compared to last year,” De told BusinessLine.

Bengal was among the States which witnessed untimely rains in November and early December. Nearly 55-60 per cent of sowing was complete (when the cyclone Jawad hit) in the key growing regions of Hooghly, Midnapore, Bankura and Burdwan. The untimely rains, which had left the fields inundated, are not only likely to impact production but also the quality of new crop.

“Even Punjab and Haryana farmers and traders raised the issue of rains affecting the crop. In comparison, the crop in Uttar Pradesh, Gujarat and Madhya Pradesh was reported to be normal,” said Goyal.

But Ashish Guru, Senior Vice-President, FCSAI, said potato stored in Bengal was lower by over 20 per cent but good production in other States could ensure the spud is well supplied to markets across the country.

The early variety tuber, which usually starts arriving by the end of December or early January, started coming into the market only by end of January. 

Heat wave impact

However, things have turned a little bad after the heat wave set in early and when half the crop was yet to be harvested in Uttar Pradesh.

“Initially, the production was estimated to be higher by 10 per cent. Even traders from Bengal, Punjab and Haryana came to Uttar Pradesh and bought potatoes. But when the heat wave set in March when the harvest was in full swing, the scenario changed for bad,” said Goyal.

The unusual heat in March not only affected the crop that was being harvested but also those in the cold storage. “This is feared to have affected 10-25 per cent of the crop. The situation will be clear once the crop that arrived in the markets after Holi is sorted out,” the FCSAI secretary said.

He said when the sorting of potatoes in the storage begins, they would be able to see the affected ones as also those rotting. “So, it is likely that we could head to a situation of normal from excess. In particular, the crop that came after Holi could be affected,” Goyal said.

Some people have foreseen this and now see prices rising during November-December. “The sentiment in the potato market has change to bullish now in view of the crop damage. Farmers could be happy with the turn of events now,” Goyal said.

“The crop that came in late to the cold storages may have been affected. But they could get dispatched first and thus the situation could be brought under control,” said Guru.

Potato production this year is estimated despite the area under the spud rising to 22.08 lakh hectares this year from 22.03 lakh hectares a year ago.

Cultivation of potato in Bengal is spread over close to 4.6 lakh hectares of land. Hooghly, Burdwan, Bankura, East Midnapore and West Midnapore are key growing districts. Close to 61 lakh tonnes of potatoes have been loaded in cold storages, which is around 87 per cent of the total capacity of the 400-odd cold storages in the State which is estimated to be 70 lakh tonnes.

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