Potato futures dropped by the maximum permitted level on Friday on ongoing fears that the Forward Markets Commission, the commodity markets regulator, could take further steps to curb a rise in prices.
The FMC has banned the launch of new Tarkeshwar potato contracts. Also effective August 1, no fresh positions are allowed during the staggered delivery period in all running contracts of potato on the MCX and NCDEX. Only squaring-off of existing positions is allowed, the FMC said.
September contracts on the NCDEX slid four per cent to Rs 1,216.7 a quintal.
Around 200-220 lakh tonnes of potato have been stored in different cold storages during the current season. Although 27-30 per cent of the cold storage stocks have been released so far from the producing belts, it is lower than the normal amount of 35-38 per cent released every year.
According to the NHRDF, sowing in Karnataka and Maharashtra has been completed but the area sown has been affected by lower and delayed rain. The kharif acreage for the tuber is expected to be lesser than or maybe the same as that last year thanks to the delayed planting. However, much depends on how the monsoon fares in the coming days.
Analysts expect potato futures to remain sideways as traders are adopting a wait-and-watch policy, expecting the Government to take some measures to curb prices. The upcoming festive season might provide some support to prices. Spot potato prices in Agra were quoted at Rs 1,183.5 a quintal.