Potato prices halve on higher supply

Potato prices have halved to Rs 4-6 a kg from Rs 10-13 a kg in the first week of January, owing to higher arrivals from across the country.

"Arrivals from all corners of the country have started in full swing, softening the prices. The scenario is not going to change at least till June," said Ashok Valunj, director, Agriculture Produce Market Committee (APMC), Vashi.

Arrivals in Uttar Pradesh, Punjab, Madhya Pradesh and West Bengal begin in the second fortnight of November, much earlier than Maharashtra, where the supply starts in January.

Shutdown of cold storages for maintenance is another reason for the drop in potato prices. The maintenance generally lasts for a month, when the previous season's crop gets exhausted and before the new arrivals. The closure of cold storages has left farmers with no option but to sell at throw-away prices.

There is an upsurge of arrivals of up to 1,800 tonne a day at the Vashi APMC compared with 200 tonne a month ago. Increased arrivals from Punjab and Shimla are also contributing to the bearish trend.

The total area under potato cultivation this year is 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.

The country is the fifth largest potato producer after China, Russia, Poland and Ukraine. The ongoing retail boom and change in consumers' mindset towards ready-to-eat segment would certainly drive the demand for potato in future, an analyst said.

Potato price for March delivery on the NCDEX, however, surged to Rs 516 a quintal on Wednesday from Rs 470.40 a quintal a month ago. It gained on the MCX as well, with the near-month contract closing at Rs 506 a quintal on Wednesday from Rs 476 a quintal a month ago.