It?s a hot potato, literally. The fear of potato production being hit on account of poor monsoon rains in key growing areas of Uttar Pradesh, West Bengal and Karnataka has led to a steady rise in retail prices of the key vegetable.
Traders and processors say farmers are getting ?reasonable? returns since the last four months after wholesale prices plummeted to a record low of R2 per kg last year, forcing farmers to go for distress selling.
At present, the retail price of potatoes is around R22- 23 a kg in most metros against the R6-7 per kg that was prevailing in January.
Potato production in the country during 2012 is estimated at 34 million tonne (mt), which is about 10% less than previous year?s output of 37.5 mt. Uttar Pradesh and West Bengal contribute to about 60% of the country?s total potato production.
?There is a fine balance between demand and supply of potatoes in the country,? Sachid Madan, director, Technico Agri Sciences, an ITC subsidiary which produces high-yielding potato seeds, recently told FE.
However, he said, due to rise in prices of vegetables in summer, consumer preference has shifted to potato, which again may push up prices of the key vegetable further.
Meanwhile, the decision of the West Bengal?s government to ban potato export from August 1 has had no significant impact on its price in the state. Since August 1, wholesale price of the regular variety of potato in West Bengal has risen to R740 per 50 kg from R680 a week back.
Potato futures prices declined marginally to R1,287 per quintal on Wednesday as traders offloaded their positions because of an increase in supplies. At the Multi Commodity Exchange, potato for delivery in September fell by 2.17%, to R1,287 per quintal.
Similarly, potatoes for delivery in October declined by 2.05%, to R1,400 per quintal.
Analysts said the marginal decline in futures prices would be reversed soon over lower productions. Besides Uttar Pradesh and West Bengal, other key potato-producing states are Punjab, Uttarakhand, Karnataka and Maharashtra.
More than 60% of the crop is raised in the Rabi season and harvested in April and May.
It is estimated that 61.47% of the output lands at the table, 21% as seed, 0.5% is processed and only about 0.03% exported. Close to 17% is lost in post-harvest handling, marketing and storage.
Despite India being the fifth largest potato-producing nation, export from India is negligible.
Potato worth only R72 crore was sold overseas in the last fiscal, shipped mostly to Sri Lanka, UAE, Mauritius, Nepal, Singapore, Maldives and Kuwait.
