Potato price may climb in July

MUMBAI: Demand for potatoes is expected to surge as the delayed monsoon could lead to a shortage of the commodity. With the potato already in short supply, traders are expecting prices to rise by Rs 200 to Rs 300 per quintal by mid-July despite a recent price correction in the futures counter.

The correction, traders say, is only a knee-jerk reaction to the 20% special margin imposed by the Forward Markets Commission effective Monday. The special margin was imposed following a sharp jump in prices. On Friday, NCDEX potato Agra delivery contract closed down 1.8% at Rs 1,065 per quintal and MCX contract was down 2.6% at Rs 1,064.8.

According to Rajesh Agarwal from KP Cold Storage in Agra, prices in Uttar Pradesh prices could rise to Rs 1,400 per quintal by July 20 from the current level of Rs 1,100.

"In addition to a fall in production, demand for the crop may go up as supply of other green vegetable might be delayed due to late monsoon. This can increase demand from the cold storages," he said. There is also demand from states like Gujarat and Assam that were earlier not buying from UP, major potato producing states.

One Vashi-based trader says the prices might rise by Rs 200 per quintal from current Rs 1,100-1,250 level. Arrivals are low and most cold storages are empty, he said.

Potato production, which rose to 300 lakh tonne last year, could decline by 15-25% this year. West Bengal and Uttar Pradesh, which produce over 70% of total country���s production, could see a fall in production. In West Bengal, production has been pegged lower by 35-40% and that compared with last year���s 60-70 lakh tonne due to plant disease.

In UP, production is down to 110 lakh tonne from last year���s level of 130 lakh tonne due to bad weather and plant disease. In West Bengal and UP, potato is sowing as rabi crop and harvesting from February onwards. Some regional production also takes place at various places

Karnataka also produces potato but as a kharif crop. As per estimates of Karnataka state horticulture department, potato acreage during the ensuing kharif season is at barely 20,000 hectares. because farmers have switched to maize or ginger.