Potato growers face heat as Pakistan slaps import tax

Potato growers in India are staring at a glut in the market and rock bottom prices after Pakistan imposed an import tax that has virtually stopped exports to the neighbouring country, traders said today.

Pakistan this week imposed a 25 per cent tax on the import of Indian potatoes in order to help local farmers to get better prices.

“Potato exports to Pakistan has come to a complete halt after Pakistan levied the high duty on Indian potatoes,” said Rajdeep Uppal of Narin Exim Corporation in Amritsar.

Potato exports to Pakistan so far in 2008-09 (April-March) have risen by more than 50 per cent to 58,500 tonnes on the back of a bumper crop.

India’s potato output this year is seen at 30-31 million tonnes, as compared to 29.5 million tonnes last year and the higher output has kept potato prices low.

“Pakistan has been one of our major importers. It used to buy at least 3,000-4,000 tonnes of potatoes in a month,” Uppal said. The cost of potatoes depended on the varieties they picked, he said.

“Even after the tension following the Mumbai attacks, Pakistan traders had not stopped buying Indian potatoes, but after imposition of the 25 per cent duty, exports have come to a complete halt,” Ratanchand Sudhir Kumar, a trader in Nizamabad said.

He said big export houses have stopped buying potatoes from traders and this would hit domestic prices hard, which are already very low.

In the key wholesale markets, the new crop of potato is being sold at an average of Rs 2 a kg, as compared to Rs 5 a kg as on December 1, a trader in Delhi’s Azadpur market here said. India is the third largest potato producer in the world after China and Russia. Apart from Pakistan, it exports potatoes mainly to Mauritius, Sri Lanka, Bangladesh and Afghanistan.

In India more than 80 per cent of the potato crop is raised in the rabi season. Himachal Pradesh, West Bengal Punjab, Uttar Pradesh and Madhya Pradesh are the main potato growing states.