Potato prices drop 10-11% in UP, Bengal

Economy


KOLKATA: A 10-11% drop in potato prices in Uttar Pradesh and West Bengal due to oversupply has forced cold-storage facility owners in these states to seek restructuring of their loans worth ?200 crore, which they failed to repay due to losses incurred last year.

UP and Bengal are the leading producers of the tuber in the country, with crop sizes of 15.5 million tonnes and 10 million tonnes, respectively. While cold storage facilities in UP have so far been able to offload only 16% of the 11.5 million tonnes of potatoes they hold, those in Bengal have offloaded about 26% of their 6.5-million tonne potato stock.

With no signs of prices picking up anytime soon, the operators of cold storage facilities in these two states have approached the Reserve Bank of India to restructure their loans.

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Patit Paban De, former president of West Bengal Cold Storage Association, said, “Last year, potato prices crashed and we were unable to repay the loan. Hence, a major portion of the refinance loan became a non-performing asset (NPA) due to the accumulated loss.”

De added that “prices had improved a bit in May and June but have again fallen by 10%. Other states are also sending potatoes to Bengal which is pushing down prices.”

The owner of a cold storage unit in Agra, who did not wish to be named, said, “Cold storages in UP are facing the same problem like Bengal. We have also approached banks to restructure our loans.” Agra-based Rajesh Goyal, secretary of Federation of Cold Storage Associations of India, said, “Rains have brought down movement of potatoes across the state and also to the neighbouring regions. Consumption has dropped by 10% in the month of July and there is abundant stock in the cold storages. This has pushed down prices. The crop, which was selling at ?9 per kg a month ago, is now fetching a price of ?8 a kg.” According to Goyal, the sentiment in the market is turning weak with the new sowing season drawing near.

India has a potato stock of 24 million tonnes, which is enough to meet the domestic requirement. The next sowing season begins in November.



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