Potato prices begin to moderate in India, more fall likely in a week’s time

According to the Ministry of Agriculture's third advance estimate of horticultural crops in India, potato was cultivated on 20.56 lakh hectares during the 2019-20 crop year (July-June) against 21.73 lakh hectares in 2018-19.

Published: Nov 19, 2020
Potato Prices_SM Image: Shutterstock

Potato prices in India have begun to moderate and could head lower as arrivals of the new crop has begun, particularly in Uttar Pradesh, say traders and cold storage owners.

“Prices have begun to drop as arrivals have begun. In Indore market, potato is ruling at Rs 28 a kg,” said Ajay Agarwal, a commission agent from Indore.

In particular, potato harvested from the new crop has begun arriving from the Indore region in Madhya Pradesh, he said. Two weeks ago, potato prices in Indore had ruled at Rs 31 a kg.

“Early arrivals of the crop from Uttar Pradesh will put pressure on prices,” said Patit Paban De, former president of West Bengal Cold Storage Association.

“The new crop has begun arriving in Uttar Pradesh and prices have begun to drop” said Mahendra Swarup, President of Federation of Cold Storage Associations of India (FCAOI).

At the primary agricultural market in Agra, potato was quoted at Rs 2,880 a quintal, up Rs 100 this month. But the important fact is that prices have remained static over the last three trading sessions.

Currently, potato prices are four times higher in the primary agricultural markets compared with the same period a year ago, according to Agriculture Ministry data.

Potato prices at retail outlets are currently ruling at Rs 45 a kg in Delhi and Rs 48 in Mumbai. Prices are unchanged in Delhi since the beginning of this month and are up Rs three in Mumbai, according to Ministry of Consumer Affairs data.

During the same time last year, potato prices in Delhi were Rs 25 a kg and in Mumbai Rs 28.

A sharp rise in the prices of potato and onion has resulted in retail inflation increasing to a six-year-high of 7.61 percent in October.

Potato prices have surged mainly due to low production as unseasonal rainfall last year affected cultivation. In addition, rains this year has affected the crop in Karnataka and Maharashtra.

Higher consumption due to the national lockdown imposed by the Union government to tackle the spread of novel Coronavirus has also aided the price spike.

According to the Ministry of Agriculture's third advance estimate of horticultural crops in India, potato was cultivated on 20.56 lakh hectares during the 2019-20 crop year (July-June) against 21.73 lakh hectares in 2018-19.

This resulted in potato production dropping to 48.66 million tonnes in 2019-20 against 50.19 million tonnes the previous year.

“Currently, stocks in Bengal could help in meeting the demand for a month,” said Paban De.

He said small quantities of potatoes are arriving in Uttar Pradesh and they were expected to increase after November 25.

“Currently, arrivals are poor in Uttar Pradesh. Once harvest gains momentum, they will increase,” said Swarup.

Agarwal said that 200 bags (each 60 kg) of potato had arrived in Indore on November 18. “Arrivals will increase by the end of the month and then, we will see prices fluctuating daily,” he said.

“Harvest of the crop has also begun in the Jalandhar region in Punjab and it will commence soon at Hoshiarpur. Arrivals of Punjab crop have begun in Delhi and prices will drop gradually,” Paban De said.

The crop from Bihar is also expected to hit the market before the end of this month, he said.

“The crop in Punjab is good,” said Swarup.

Uttar Pradesh contributes 33 percent of India's total potato production, while Bengal is second making up 28 percent of the production. Bihar (13 percent), Gujarat (eight percent) and Punjab (5.8 percent) are the next best contributors.

Arrivals of early varieties of potato have been affected this year due to rains, forcing traders to rely on stocks stored in cold storages.

Paban De said the trade is keeping its fingers crossed on production since it depends on the per hectare yield. “The area under potato has increased 5-10 percent in view of the good price, he said.

(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)

Original Source: https://www.moneycontrol.com/news/business/markets/potato-prices-begin-to-moderate-in-india-more-fall-likely-in-a-weeks-time-6136611.html

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