Soaring potato prices in West Bengal are unlikely to come down after touching almost the double of last year?s level. While the state agriculture ministry is happy with the fact that the farmers are getting a better price for their produce, concerns are brewing over prices rising much higher.
While during the last year, potato prices remained high despite a bumper crop, the traders? bodies see no reason in pricing it higher this year as the production is down in Bengal and there is a lot of demand from neighbouring states.
Prices for potato at the time of loading in cold storages have gone up to R700 per quintal in 2012 against last year?s level of R400-420 per 100 kg. The retail price has crossed R14 per kg and is expected to climb further in next two weeks. The state government has formed a task force to keep tab on the surging prices.
At a first glance the West Bengal government has made the future trading potato responsible for sudden surge in prices. ?It seems that potato worth R300 crore has already been sold online [through commodity exchange platforms] and that has jacked up the prices this year. The task force will closely monitor any sudden jump in prices,? said Arup Roy, minister of state for agriculture marketing.
?There is no reason to worry if potato prices remain at this level but it is unlikely to come down much in coming days,? he said. According to him, farmers are selling potato at R8 per kg at present. It works out to R13-14 per kg after they are packed and stored in the cold storages.
West Bengal has produced 86 lakh tonne potato this year against a domestic demand of 52 lakh tonne. The state?s production is significantly lower than last year?s level of around 13.3 million tonne (mt). Moreover, potato production in Uttar Pradesh also got hit and is expected to be at 12.86 mt against 13.6 mt last year.
The NCDEX potato futures gained by 3.9% despite the cold storages are almost full this year. ?The future trading has set a higher price and this has caused a spike in the market,? said Patit Paban Dey, member of the West Bengal Cold Storage Association.
?It does not seem that prices will come down from the present levels this year. Although supply will increase in next two weeks after the cold storages start releasing the crop, but prices seem to remain at R14-15 level as marketing and storage costs have gone up,? Dey said.