Potato turns hot on spurt in demand, lower crop

Shobha Roy | | Updated on: Aug 03, 2020

There has been a rise in potato consumption due to the reverse migration of labourers

Potato prices are on a boil across the country on the back of a steady rise in demand and a lower production of the crop this year. The wholesale price of the tuber has increased between 10 and 25 per cent across key producing districts of West Bengal and Uttar Pradesh in the last one month.

The average wholesale price of potatoes is ruling at around ₹23-24 a kg in Bengal (₹22 a kg about a month back), while the same in UP is around ₹25 a kg (₹20 a month back). The retail prices are hovering around ₹32 a kg in Delhi, ₹50 a kg Chennai and ₹30 a kg Kolkata.

Migration boosts demand

According to Arvind Agarwal, President of UP Cold Storage Association, there has been a spurt in potato consumption across States such as Assam, Bihar and Jharkhand among others due to the reverse migration of labourers. With the floods in Assam and Bihar rendering green vegetables more expensive, people are resorting to higher consumption of the tuber.

“A large quantity of potatoes has been moving from western and central UP to some of these markets in Assam, Bihar and Jharkhand as the demand has been very good this year. Moreover, for a trader, exporting potatoes to these markets would entail lower cost and higher turnaround,” Agarwal told BusinessLine .

The imposition of lockdown on certain days across West Bengal, Odisha and Bihar has also led to a surge in demand as people have been stocking up.

Lower crop in Bengal

Potato production in West Bengal has been lower than expected primarily due to the delayed sowing and the unfavourable weather conditions during harvesting. The State, which produces close to 110-115 lakh tonnes of the tuber each year, is estimated to produce close to just 85-90 lakh tonnes this year. This is lower than last years’ production of 92-lakh tonne.

The loading in cold storages has also been lower as compared to last year with only 55 lakh tonne (approx. 79 per cent of the total capacity) of potatoes making its way to storage units. There are around 400 cold storages in Bengal and they are capable of storing close to 70 lakh tonne of potatoes. Production has also been lower in UP, which is the largest producing State in the country.

Cold storages in UP have been able to load around 17 crore packet (one packet holds 50 kg), as compared to close to 20 crore packets in a normal year.

“While the loading in cold storages have been relatively lower this year, the offloading of stock so far during this year has been higher because of the steady demand,” Agarwal said.

According to Patit Pavan De, Member, West Bengal Cold Storage Association, close to 34 per cent of potatoes kept in cold storages in Bengal has been released so far.

There is a stock of close to 37 lakh tonne and this should be sufficient to last till the arrival of the next crop.

“The arrival of the new crop in southern markets post August 10 would exert some pressure on prices,” he added.

Published on August 03, 2020
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