Potato hits lower circuit, plunge 4% on FMC curbs

Potato prices fell by 4% to hit lower circuit at Rs 1,220.70 per quintal in futures trade today on offloading of positions by nervous speculators after commodity markets regulator FMC imposed restrictions in order to check rising prices in physical markets.

Besides, increased supplies in physical markets following fresh arrivals from producing regions in UP, Punjab, MP and West Bengal too weighed on prices.

At the Multi Commodity Exchange, potato for delivery in June-month contracts plunged by Rs 50.80, or 4%, to hit a lower circuit at Rs 1,220.70 per quintal, with a business turnover of 184 lots.

The July delivery also fell by a similar margin to hit lower circuit at Rs 1,280.60 per quintal in a business turnover of 12 lots.

Analysts said a steep fall in potato prices in futures trade was mostly attributed to commodity markets regulator FMC decision to curb futures trading in contracts for July, August and September in order to check prices by disallowing fresh positions and hiking deposit amount on buyers.

MCX has hiked the margin money from 5% to 30% of the value of the commodity to restrict buyers.

Meanwhile, both wholesale and retail prices of potato are on rise even as the domestic production is estimated to be higher by 2.3% at 46.4 million tonnes in 2013-14.