The lower production and lower-than-expected release of potatoes from cold storage in West Bengal, the second largest producing State in India, have pushed up potato prices across the key growing markets of Uttar Pradesh, Punjab and Gujarat.
The wholesale price of the spud is currently ruling at ₹16-18 a kg in some of these markets despite production being high in these States. Prices in West Bengal are relatively higher at ₹21-23 a kg due to lower release from cold storages. Current prices are over 60 per cent higher than the same period a year ago. Nationally, the weighted average modal price (the rate at which most trades take place) is ₹16.31 a kg compared with ₹10.36 a year ago. Industry insiders expect prices to remain firm at these levels backed by better sentiments in the market and a steady demand for potatoes from across the country.
According to Rajesh Goyal, President of Federation of Cold Storage Associations of India, potato prices in UP, Punjab, Gujarat and Bihar went up during the harvesting season as the untimely rainfall in West Bengal led to damage of the crop. This pushed up the sentiments and prices increased. They have ruled steadily over the last 45 months. “There was some damage to the crop in West Bengal and this pushed up the sentiments and people from across the country started purchasing potatoes from UP, Punjab and Gujarat. This has resulted in a rise in prices to ₹1618 a kg. They are ruling firm at these levels,” Goyal told BusinessLine.
UP, which has had a bumper production of the spud this year, has released close to 38-40 per cent of potatoes from cold storage so far this year.
Lower crop in West Bengal
West Bengal, the second largest producing market, has registered a nearly 23 per cent drop in production this year. Production of the tuber in the State is down at around 85 lakh tonnes this year, as against 110 lakh tonnes in 2021.
“There were untimely rains during the sowing period which led to rotting of some crop. Though re-cultivation was done on some parcel of land, it was not good enough to offset the crop that we lost,” Patit Paban De, Member, West Bengal Cold Storage Association, said.
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. “The release from cold storage is close to 32-33 per cent as compared to close to 38 per cent during usual year. Normally by August end close to 45 per cent of potatoes kept in cold storage is released but this year we expect the release to be around 40 per cent. This is because the price at the time of loading was around ₹1,600-1,800 a quintal but the prices at the time of unloading, excluding all expenses, is currently ruling at around ₹1,400-1,600 a quintal. So they have been incurring a loss of around ₹200 a quintal. So people are on a wait-and-watch mode,” De said.
Meanwhile, Punjab, UP and Gujarat potatoes have been making their inroads into Assam, Jharkhand, Odisha and Chattisgarh among others, the markets which were typically catered by West Bengal.
According to Ashish Guru, senior vice-president, Federation of Cold Storage Associations of India and president of Gujarat Cold Storage Association, due to the uneven distribution of monsoons, prices of green vegetables are ruling very high and this has led to increased consumption of potatoes.