High supply leads to dip in potato prices, farmers struggle to recover cost

Market participants attribute the steep fall primarily to old stocks still lying in cold storage in large quantities, even as fresh arrivals gather pace, along with expectation of bumper crop this yr

Potato prices have slumped early in the season, with wholesale rates in key mandis across states falling sharply over the past month due to increased supply of the staple food, forcing farmers to either dump their produce on roadsides or engage in distressed sales.

 

Market participants attribute the steep fall primarily to old stocks still lying in cold storages in large quantities, even as fresh arrivals gather pace. A second factor is the expectation of a bumper crop this year, supported by favourable weather conditions so far. Traders said prices could remain under pressure through this month, though a recovery is possible from next month as the crop begins moving into cold storage and market arrivals ease.

Steep fall in key markets

In Agra, a major market in Uttar Pradesh, wholesale potato prices have fallen over the past month from ₹900-to ₹1,250 a quintal (100 kg) to ₹500-to ₹650. In Kolkata, West Bengal’s key mandi, prices have declined from ₹1,500-to ₹1,550 to ₹1,100-to ₹1,200 a quintal. Over the same period, Indore in Madhya Pradesh saw rates fall from ₹500-to ₹1,400 to ₹300-to ₹900, while Delhi’s mandis reported a drop from ₹800-to ₹1,400 to ₹300-to ₹900. In Ludhiana, Punjab, prices eased from ₹1,000-to ₹1,200 to ₹700-to ₹750 a quintal.

 

The wholesale decline has also filtered into retail markets. Potatoes that sold for around ₹20-to ₹25 a kg last month are now trading at about ₹13-to ₹20 a kg.

Supply more than demand

Deepak Kumar, a potato trader in Agra, said market arrivals had been strong, and prices had fallen quickly over the past month because large quantities of last year’s stock were still available, alongside fresh arrivals.

 

Vinesh Kumar, a trader at Delhi’s Azadpur mandi, said the market’s consumption was 90-100 trucks a day, while arrivals were currently running at 130-140 trucks, resulting in a supply overhang and weaker prices.

 

Govind Kajaria, a member of the West Bengal Cold Storage Association, said cold storages that should have been cleared by November 30 were still not empty, with about 5 million bags of potatoes still held in the state’s cold storages.

 

Hasmukh Jain, president of the Madhya Pradesh Cold Storage Association, said storages that typically emptied out in November might only be cleared by January 15 this time. He added that older potatoes also came to market quickly in December amid fears of decay, even as new arrivals started, amplifying supply pressure. He said potatoes were currently selling at ₹5- ₹6 a kg in mandis, while even better quality potatoes bought by chips companies had slipped to ₹8 a kg. He added that companies were buying only as needed for now, and might step up purchases from February, when potatoes would begin moving into cold storage.

 

R P Gupta, former director at the National Horticulture Research and Development Foundation (NHRDF), said weather conditions had been favourable for the crop so far, and if the pattern held, production could rise by about 5 per cent this year. He said expectations of higher output were also weighing on prices. Official data shows potato output at 58.1 million tonnes in 2024-25, and it could cross 60 million tonnes this year.

 

Falling prices have increased pressure on farmers. Batuk Narayan Mishra, a potato grower in Uttar Pradesh, said most farmers were getting only ₹5- ₹6 a kg, while production costs were above ₹8 a kg. He said harvesting was unavoidable as farmers needed to clear fields for wheat sowing.

 

Traders said prices could improve from next month as more produce moves into cold storage and arrivals in mandis moderate. Deepak  said rates had already fallen steeply and should begin stabilising. Vinesh said the shift of potatoes into cold storages next month could reduce supply pressure in wholesale markets and lift prices.