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Potato prices soar on tight supply

Soiiel Parvez
Potato prices rose in the recent months as growers, traders and cold storage operators have tightened supply to get higher prices.
Retail prices of potato now range from Tk 24 to Tk 26 a kilogram in the city markets, up by 85 percent fromTk 12-15 in early March, immediately after the harvest, according to Trading Corporation of Bangladesh (TCB).
Insiders linked the price spiral to a tight supply from cold storages amid speculation that potato prices may go up further due to a decline in production this year.
Retail prices were Tk 12-Tk 15 a kg in mid-July last year, according to theTCB.
"Potato production has dropped and there has been a speculation since the beginning of the season that potato will bring good business this year," said Mostofa Azad Chowdhury, managing director of Motahar Group of Industries.
"So the stockists are releasing potato slowly," said Chowdhury. Motahar Group owns nine cold storages with 10 lakh tonnes of capacity, mainly in the northwestern potato producing zone in greater Rangpur.
"We have not got adequate potato from farmers to fill our storages this year. We had to give incentives such as advance loans to farmers to encourage them to grow and store potatoes with us," he said.
Potato output slipped marginally to 82.05 lakh tonnes this year from 83.26 lakh tonnes last year due to a reduced acreage, according to Bangladesh Bureau of Statistics.
Even then the output is much higher than the annual demand, as has been estimated by the Bangladesh Cold Storage Association (BCSA), which says the annual demand for potato stands at about 60 lakh tonnes.
This year, 40 lakh tonnes of potatoes including 7-8 lakh tonnes of seed potatoes, have been stored in the cold storages, up from 36 lakh tonnes last year, said Jasim Uddin, chairman of the association.
Potatoes from cold storages have started coming to market from June and the supply will continue until the arrival of the next crop.
Jasim blamed the price spiral on the increased electricity tariff, higher rentals for storing potatoes in storages and a fall in production this year.
He, however, disagreed that there is a reduced supply from the cold storages.
He blamed traders in the supply chain for the price hike, which has made the farmers happy.
"It's good that the prices have gone up. It will be good if I can recover the losses of the past two years," said Mir Sirajul Islam, a farmer in Munshiganj district, a major potato growing area.
The farmer, however, said growers will hardly be able to reap the benefit of the price spiral.
"Farmers do not have huge stocks of potato this year," he said, adding that the stockists (aratdars) and operators of cold storages have bought bulk of the potato this year and kept them in cold storages.
They are delivering potatoes in smaller amounts, he said. Nasir Uddin, another farmer in Rangpur, echoed Islam that growers have stored a small amount of potatoes this year in cold storages.
He said the prices of two varieties of potato — diamond and cardinal -- have increased more than the prices of the granular variety.
There is a speculation that the prices of diamond and cardinal varieties will increase even further after the fasting month of Ramadan, he said.