The humble potato is a staple food of millions of Indians, it provides carbohydrates and fills the belly of the hungry, at an affordable cost. Multi-nationals like McCains Foods (Canada) have made it a billion dollar proposition. It is joined by Frito-Lays, McDonalds and Kentucky Fried Chicken among countless more corporations. In the Indian context, potato prices are a sensitive socio-political issue. If potato and / or onion prices rise too high too fast, political equations tend to change over time. So it is important to understand how potato prices are likely to be determined in the coming future.
Uttar Pradesh is the largest potato producing state in the Country.
The Burdwan factor
Burdwan in West Bengal is a potato trading hub. West Bengal produces approximately 21 - 25% of the total Indian potato output. Therefore the crop scenario in West Bengal and the prices quoted at Burdwan agri market determines the prices for potatoes in North India and by extension, the entire Country. The cold storage association has some say in the matter as they stock potatoes and provide a buffer against price fluctuations (atleast hypothetically). In the financial year (FY) 2012-13, the agitation by the cold storage association led to steep price declines in the produce. The bone of contention is the rising input costs of the cold storage business owners and the inadequate compensation assured by the West Bengal government. Then come the fast food / snack food association members who have captive arrangements and / or contract farming arrangement with West Bengal farmers. Any shift by the snack food makers from Bengal can have a telling effect on the price determining dynamics.
Vijay L Bhambwani