Supply shortage stokes domestic potato prices

The price of potato has risen 20% in the past month. They're now Rs 25-40 a kg in the retail market across India

Potato prices in the country are high and expected to remain so, due to an output decline in the major growing states.

This was exacerbated by West Bengal earlier this month banning movement outside the state. The government here has temporarily re-allowed supply but if it stops, prices elsewhere will rise again. The price of potato has risen 20 per cent in the past month. They’re now Rs 25-40 a kg in the retail market across India.

Traders say production in Uttar Pradesh is down 10-20 per cent and in West Bengal by 20 per cent. The two states account for nearly 60 per cent of India production. In Bihar, the third largest producer, output is down 10 per cent. UP produces about 15 million tonnes and Bengal about 12 mt every year. Nearly 65 per cent of West Bengal’s total production is consumed outside the state.  In addition, the early crop, harvested during August-September in southern India, is down nearly 50 per cent, according to traders.  The autumn crop accounts for nearly 20 per cent of the total output.

“Potatoes are expected to remain at Rs 25-30 a kg in the near future, as overall production is low,” said Sukumar Samanta, a trader based in West Bengal.

On August 5, the state government here sealed the  borders for movement of potato, while instructing traders to sell the commodity at no more than Rs 14 a kg. Howevver, after traders threatened a a three-day strike, the state government on Wednesday allowed sending 5,000 tonnes a day for a week to neighbouring states.

Last week, prices in Odisha, Jharkhand, Bihar, Assam and Chhattisgarh are said to have touched Rs 40 a kg, with Bengal not allowing supply to them. Nearly 70 per cent of the demand in the eastern states are met by Bengal and the rest by UP. However, with supply from UP nearly zero, prices in these states had shot up abruptly when the Bengal government stopped  the supply.

West Bengal sells potatoes worth nearly Rs 3,000 crore every year to neighbouring states. In November 2013, the state had for the first time had put a restriction on the inter-state movement.