Potato contracts hit upper circuit

UNSEASONAL SHOWERS CATCH MARKET PLAYERS OFF GUARD

Potato hit the upper circuit across all contracts on the Multi Commodity Exchange(MCX) on Monday as rains have disrupted harvesting in north-eastern states. In the spot market, prices jumped approximately by 25 per cent to Rs 5-6 per kg from Rs 4-5 on Saturday.

Potato for March, April, May deliveries jumped by 6 per cent to close the day at Rs 572 a quintal, Rs 560 a quintal and Rs 539.80 a quintal compared with Rs 539.60, Rs 528.40 and Rs 539.80 on Saturday.

The weather at major producing centres has been cloudy for the past 4-5 days, forcing farmers to slow down potato excavation.

"It is a sentiment game where traders believe arrivals would decline in the days ahead," a noted city-based trader said.

Arrivals in Mumbai was around 1,500 tonne, just enough to meet consumption demand, thus, pushing up prices marginally higher by Re 1 a kg. "It's a temporary phenomenon which would overcome very soon when the weather clears up and harvesting peaks," the trader said.

"There is no reason for prices to go further up as we have a bumper crop. Prices will decline in the next 3-4 days, said Ashok Valunj, director, Agriculture Produce Market Committee (APMC), Vashi.

The total area under potato cultivation this year was up by about 25 per cent to 18-20 lakh hectare compared with 15 lakh hectare last year.

Potato output is also expected to be higher at around 30 million tonne, up by 4 million tonne over the previous year's production.

The output is much more than the normal requirement of 25 million tonne.