Potato prices crash by 50%

Good harvest, arrivals take a toll on spot rates.

Wholesale potato prices have crashed by an average 40-50 per cent in various mandis over the last one month following harvest and arrivals of the rabi crop.

At Farukhabad (Uttar Pradesh), a major potato trading centre, the modal price has come to Rs 260 a quintal from Rs 640 earlier this month. The modal price is the price at which maximum arrivals take place.

The modal price in New Delhi has slipped from Rs 600 to Rs 425 a quintal in the same period. At the retail level too, the price has come down from Rs 12-14 a kg to Rs 8-10 a kg in the same period.

"The rabi crop condition is good and 10-15 per cent more area has come under sowing in the major producing states such as Uttar Pradesh, Punjab, Haryana and Madhya Pradesh since farmers had received remunerative prices in the last season," said R P Gupta, director, National Horticultural Research and Development Foundation (NHRDF).

NHRDF estimates 2007-08 potato output at 30 million tonnes, up about 11 per cent from 27 million tonnes last year. Potato is mainly a rabi crop with more than 95 per cent of the production coming from rabi sowing.

"The declining trend is likely to continue in the coming months with fresh arrivals from Punjab, Haryana and Uttar Pradesh," said Trilokchand Sharma, president, Delhi Potato & Onion Merchants Association.

The dip in spot market is, however, not reflected in the futures price. At the Multi Commodity Exchange (MCX), Tarkeshwar potato futures for March delivery have marginally appreciated from Rs 432 a quintal (on December 1) to Rs 446. Analysts expect a weakening trend in days to come.