Potato prices to fall on fresh arrivals

BANGALORE/CHANDIGARH: Prices of potato, a must on most Indian tables, have started moderating, falling anywhere 15-20% on the back of strong arrivals across major mandis in the country. During the last one year, the humble tuber’s price had more than doubled.

In the Jalandhar wholesale market, for instance, potato is selling in the range of Rs 4-5 per kg against Rs 6-7 per kg a week ago.

Traders say arrivals have been robust and hence the downward trend in prices. “There was a lull in arrivals which led to a rise. We are getting around 30-40 truckloads into Bangalore,” said a city-based potato and onion wholesaler.

Modal price per quintal in Bangalore has declined by Rs 250 during the last one week from Rs 1,700. They had touched a high of Rs 2,000 per quintal on December 9.

Similar trend of higher arrivals is pushing prices downward at Delhi’s Azadpur mandi where a 50-kg bag is now priced at Rs 320 against Rs 400 a week ago. The fall in potato prices perhaps indicates the moderation in the inflationary pressure, which many say would ease on with a rise in the arrival of the rabi crop.
Food inflation (defined as primary articles or food, cereals and fuel) has declined to 18.65% for the week ended December 12 after touching 19.95% for the week ended December 5.

And there is definitely more good news in store. “The rates are likely to fall in north and east India further by 20-22% in the next fortnight fuelled by supply of new crop from Uttar Pradesh, West Bengal and Bihar,” says Mr Sukhjeet Singh Bhatti, president of the Confederation of Potato Seed Farmers.
On MCX, potato futures for March 2010, April 2010 and May 2010 were down 3.76%, 4% and 3% compared to Wednesday’s closing price.

But what could be a cause for concern is the prospects of exports. Potato traders have contracted, for instance, to supply two rakes (one rake is 200 tonnes) of potatoes to Bangladesh and have been making purchases.