Potato prices have crashed nearly 70 percent across primary agricultural markets from their peak of Rs 2,900-2,750 a quintal in the last week of November on higher arrivals.
“Prices are actually below Rs 800 a quintal in most growing regions. The new crop is higher than last year as many farmers went for the crop as prices ruled high during the sowing time,” said Patit Paban De, former president of West Bengal Cold Storage Association.
At Agra's agricultural produce marketing committee (APMC) market, most arrivals are trading between Rs 850 and Rs 900 a quintal from the November peak.
In Punjab, prices in most markets in Jalandhar district are ruling lower than Rs 1,000 a quintal as also in West Bengal. During the same time last year, prices were at Rs 1,250 in Agra, Rs 1,600 in Punjab and Rs 1,500 in Bengal.
According to the consumer affairs ministry, potato prices in Delhi were Rs 21 a kg on January 11 against Rs 45 on November 30, while in Mumbai they dipped to Rs 32 from Rs 52. During the same period a year ago, the kitchen staple was selling at Rs 28 and Rs 36 a kg.
“The crop this year is good as well as production. The weather, too, has been conducive for harvest,” Federation of Cold Storage Associations of India (FCAOI) president Mahendra Swarup said.
According to the agriculture ministry data, 4.65 lakh tonnes of potato arrived in Uttar Pradesh in the past month compared with 2.13 lakh tonnes the previous month and 4.48 lakh tonnes in the year-ago period.
Swarup said the weather was a little warm in Uttar Pradesh, which favoured harvesting. “Had the weather been a little cold, then the story would have been different. There will be least damage to the crop from the current weather,” he said.
Paban De said warm weather was putting pressure on the prices. “If the weather turns a little cold, then prices could rise again,” he said.
Farmers could be affected if prices drop further, Paban De said. “There are chances of the prices dropping further to Rs 600-700 a quintal but it will hurt the farmers,” he said.
Farmers who bought potato seeds for cultivation would feel the pinch while those who reused their seeds could see some marginal gain, said Paban De.
According to him, farmers paid a higher price of Rs 800-1,000 a quintal for seeds and other costs such as labour were also high.
If farmers opt to store their crop in cold storage, then it will cost them an additional Rs 1,000 quintal. They will look for such options only if prices crash and after cold storages begin to store the crop.
“In Bengal, cold storages will not start storing before the last week of February,” said Paban De.
“No crop has come to us for storage. It will take mid-February before farmers approach us for storage,” said Swarup.
One reason for prices to drop sharply is that potato farmers went in for early cultivation to take advantage of high prices in November.
“Potato was cultivated early in many parts of the country. In Bengal, farmers in districts such as Bankura and Medinipur went for early cultivation,” Paban De said.
If there is an exception to prices ruling low, it is Madhya Pradesh, where potato is quoting at more than Rs 1,200. “Madhya Pradesh potato is used for processing (products like chips). Hence, it is always sold at a premium,” Paban De said.
Potato prices surged in November following low production as unseasonal rainfall affected cultivation. Rains also hit the crop in Karnataka and Maharashtra.
According to the agriculture ministry's third advance estimate of horticultural crops, potato was cultivated on 20.56 lakh hectares during the 2019-20 crop year (July-June) against 21.73 lakh hectares in the previous year.
Potato production declined to 48.66 million tonnes in 2019-20 against 50.19 million tonnes the previous year. Higher consumption due to the lockdown also aided the price spike.
(Subramani Ra Mancombu is a Chennai-based journalist who writes on commodities and agriculture)
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