Low potato yield in the major potato-producing states of Uttar Pradesh and West Bengal is causing rise in potato prices. The upward movement of potato prices is likely to continue until December this year, when the fresh arrivals will enter the market.
Image Credit: Freepik
In the past couple of months, there has been a dramatic rise in potato prices. Until the end of March, retail markets saw potato prices hovering around Rs 18-20 per kg. However, by the second week of April, prices had climbed up to a range of Rs 25-30 per kg in various markets. (Depending upon the quality, potatoes are currently being sold at Rs 20-40 per kg in retail markets like Delhi, Noida, Ghaziabad, and Gurugram.)
According to data from the Department of Consumer Affairs, the all-India retail potato price was Rs 26 per kg in April (April 13 to be precise), marking a 10.18% month-on-month increase and a 32% year-on-year increase. Traders reported that the wholesale price of potatoes stood at Rs 1,944 per quintal, reflecting a 33.18% increase from the previous year and an 11.44% increase month-on-month.
Why potato price are rising in India?
The significant rise in potato prices is primarily due to lower yields resulting from damage caused to crops by unanticipated rains in November last year. The newly planted potato crops suffered damage in late November, compelling farmers to replant potatoes in December. However, recent rainfall during April has actually ruined the crops that were ready to be harvested. (Potatoes are a rabi crop. Farmers sow them during the October-November period and harvest them in March-April. Rabi crops are not reliant on rainfall like kharif crops.)
Based on the Agriculture Ministry’s first advance estimate for 2023–24, potato production in 2023-24 is expected to have fallen to about 58.99 million tonnes from about 60.14 million tonnes in the previous year.
Potato traders have reported a drop in production in West Bengal and Uttar Pradesh, the two major potato-producing states.
West Bengal harvested nearly 12.5 million potatoes in 2022–2023. About 40% of the potatoes produced in West Bengal are usually sold to other states, mainly Andhra Pradesh, Odisha, and Assam.
On the other hand, Uttar Pradesh, with its potato production of about 16.5 million tonnes during the same period, sells its surplus potatoes to states including Assam, Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala. Uttar Pradesh has produced about 17 million tonnes of potatoes so far this year.
Many instances of potatoes getting spoiled during lengthy transit have also contributed to higher potato prices.
Furthermore, the summer heatwave also poses challenges for the transit of potatoes from Uttar Pradesh, located in North-Central India, to states in the North-East like Assam, as well as Southern states including Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala.
Reports indicate that loading in cold storage has also decreased by about 10-12%. Due to lower production, farmers are reluctant to sell their produce right away and are waiting for prices to rise.
Meanwhile, people are consuming more potatoes as some other vegetables have been damaged by the heatwave. This has led to a shrinkage of stocks in cold storage.
Potato prices rise unlikely to recede
Potato traders have indicated that prices would go up further by an additional 5–10%, owing to the damage caused to the tuber crop by unseasonal rains, and cold storage facility owners releasing potatoes in a manner that allows the stock to meet domestic consumption until the arrival of the next crop.
When demand is high and supply is low, prices tend to firm up. So, Indian households will probably continue to feel the strain of rising potato prices until the next crop hits the market in December.
