Potato prices double over a month but expected to cool

There has been a surge in potato prices in recent weeks, though observers say this is temporary, till the next season's crop arrives.

The reason for now is reduced supply and a delay in harvesting of the new-season crop. Data compiled by the Nashik-based National Horticultural Research and Development Foundation showed wholesale potato prices have almost doubled at the Agra mandi, Uttar Pradesh, one of the country's largest producing centres, to Rs 11 a kg on Friday from Rs 5.70 a kg in early October.

Total arrivals in the Agra mandi were 1,200 tonnes on Friday as compared to 1,420 tonnes on October 1. The average cost of potato cultivation is estimated at Rs 5 a kg. Considering cost of storage, transportation and loss in quantity, the break-even price should be Rs 7-8 a kg. Any price below this level is a loss to farmers, said an observer.

Meanwhile, unseasonal rainfall in October had benefited the sowing of potatoes, due to the required soil moisture. While harvesting of the early rabi crop has begun in a small way, sowing is still on in major growing areas, including West Bengal and UP.

"Therefore, the spurt in potato prices is a temporary phenomenon. If farmers do not get a little higher than their cost of production, they would stop sowing next time," said Ajit Shah, president, Horticulture Exporters Association.

Normally, supply of the older season crop starts waning towards the end of November. This year, 25-30 per cent of the stock is still left. Data from the National Horticulture Board showed India's total potato output at 42.17 million tonnes in marketing season 2014-15 as compared to 41.55 mt last year, despite a marginal decline in the sowing area at 1.99 million hectares versus 1.97 mn ha in 2013-14. According to the Shimla-based Central Potato Research Institute, the crop has been normal so far this season. A clear picture will emerge by the first half of December, said a senior official there.