Potato prices cool down, but rains can play spoilsport

Potato prices, which skyrocketed during this winter, have dropped over 30 per cent in about a month but the party could be spoilt again if rain gods come calling again.

Potato prices were seeing a sharp rally in the commodity markets as well as mandis recently as the crop got damaged following unseasonal rains across northern India.

Analysts as well as traders expect the prices to cool down with better weather conditions, while warning that an upward rally might resume if untimely rains affect the crops yet again.

"If bad weather continues to prevail in major producing areas, prices may see new higher levels," analysts at commodity brokerage firm Karvy Comtrade said. However, if all factors remain conducive, prices are expected to show a good correction in the medium term, they added.

While increased demand during the Navratra season could push the prices higher in the short term, higher supply in the market due to improved weather conditions is likely to check any major surge.

"Prices have come down in the the past 10-15 days and could move up as there could be more demand during Navratra," said Trilok Chand Sharma, president, Delhi Potato and Onion Merchant Association.

However, another trader said that more arrival at the mandis would offset the impact of Navratra demand on prices.

Sharma also said that prices in the coming days would depend primarily on arrivals.

While the retail market potato prices in Delhi have come down to about Rs 10 a kg, from about Rs 15 a month ago, the prices at the capital's Azadpur wholesale market, a leading trading centre in the country, are hovering between Rs 4.70-6.25 per kg.

According to Delhi Government's Agricultural Produce Marketing Committee, wholesale potato prices in the capital city were between Rs 4.50-8.25 per kg on Friday.

Traders said at least 10 per cent of the crop was affected due to continuous rains for 3-4 days in major producing areas of Uttar Pradesh and Tarkeshwar in West Bengal.

According to Karvy Comtrade, potato production in the country is likely to see 10-15 per cent decline from an earlier estimate of 26 million tonne this year due to unseasonal rains.

In West Bengal, potato output is likely to be 20 per cent less at 7.48 million tonne against the initial estimate of 9 million tonne although acreage has increased to 4.2 lakh hectare this year from 3.1 lakh hectare last year.

The prices of good quality potato witnessed a bigger rise in the recent past with quality of the produce getting affected due to hailstorms and blight "" a sort of disease that affects potato crops in many parts of northern India.

The Central Potato Research Institute estimates 10-15 per cent of crops have been damaged due to blight in the north.