Potato sees large volumes in near-term contracts

The recently launched potato futures on the Multi Commodity Exchange of India is attracting large volumes for short-term contracts owing to the recent completion of autumn crop harvesting.

For April delivery 17,580 kg of potato was traded on March 9, the day trading was launched, which surged to 90,030 kg on March 13 and slipped to 60,060 kg on March 18.

Open interest for April contract also dropped to 21,870 kg on March 28. On the other hand, open interest for June contracts remained lower at 4,590 kg on March 28.

Experts believe the price movement depends upon the actual demand-supply situation in the country. Potato is a autumn crop throughout the country. With the completion of the autumn crop harvesting volumes are expected to pick up and trades should increase.

However, prices for April contract are lower than June contracts. Prices for the June contract closed at Rs 777 per quintal on March 28 as compared with Rs 777.5 a quintal on March 16.

India is the fifth largest producer of potato after China, Russia, Poland and Ukraine. However, potato productivity in India is merely 16-19 tonne per hectare. In Europe and the US yield is almost 30-40 tonne per hectare.

India produced about 24.15 million tonne of the crop during 2004-05 as against 23.27 million tonne in 2003-04. According to the ministry of agriculture, production during 2005-06 is estimated at 24.65 million tonne.

Average acreage under potato varies between 12 to 15 lakh hectares depending on the weather condition during the sowing period.

Potato is grown mainly in UP, Punjab, Haryana, West Bengal, Madhya Pradesh, Bihar, Andhra Pradesh, Tamil Nadu and Gujarat.

The four potato export zones in India are UP, Punjab, Madhya Pradesh and West Bengal.

Potato is the world's fourth important food crop after wheat, rice and maize owing to its great yield potential and high nutritive value and accounts for nearly half of the world's annual output of all root and tuber crops.

Thus, with an annual global production of about 300 million tonne, potato is an economically important staple crop in both developed and developing countries.