The Irish Potato

GLOBAL MARKETS

Now we might call it the MCX May Potato, but econohistory quotes the Potato's Irish origin comprehensively.

Due to blight, the great famine happened between 1845-49 destroying the primary source of food for many Irish. This is a classic case study of the linkage of a crop and an economy.

Acccording to some estimates, 500,000 to 1 million deaths occurred in the three years slashing 12 per cent of the total population. The strange fact was that the crisis happened well into the otherwise prosperous industrial age.

The famine got bloated owing to the single crop dependency and primitive communications, poor retail distribution system and poor land reforms. A single crop got the economy crumbling down. And it was only later that the agricultural act was changed. And econohistory is more complicated as human beings are myopic and don't link potato's with economics.

In today's situation, too, the increasing importance of Potato is clear -- the price of May MCX Potato has been outperforming the MCX AGRI index. This is a leading indicator that the crop should remain an important one for the country given that India is one of the biggest producers and consumers of Potato.

MCX May seems to be headed down from 630 to 540. Technical reasons suggest a short term a-b-c corrective is running for the crop. 540 is a multi-month support and should hold. And considering the Agri index is still trended up, the intermediate trend for Potato still seems to be up. The key levels stand near 600.

The writer is CEO, Orpheus Capitals, a global alternative research company.