Potato prices go up as production drops

Potato prices have skyrocketed in Bangladesh amid a drop in production as farmers are increasingly turning to more profitable crops while poor weather conditions also lowered supply, according to market players.

Mohammad Al Amin, a retailer of Mirpur's Pallabi area in the capital, said he sold potatoes for Tk 25 per kg before Eid-ul-Fitr. "But I am selling potatoes at Tk 35 per kg as the price has gone up in the wholesale market," he said.

Traders at kitchen markets in Dhaka say the tuber is now selling for Tk 35 to Tk 40 per kilogramme (kg), up from Tk 22 to Tk 25 ahead of Eid-ul-Fitr on April 22 earlier this year.

Acreage dropped to a seven-year low of 4.55 lakh hectares in the current fiscal year (FY) from 4.64 lakh hectares in FY2021-22, according to the Department of Agricultural Extension (DAE).

The DAE estimates that potato production has increased this year despite the decline in acreage but cold storage owners and traders say overall yields have dropped.

To take advantage of the reduced production, some traders are holding back their stocks in hopes of getting higher prices later on.

Younus Bepari, a trader from Munshiganj who stocked 100,000 kgs of potato in cold storage, said wholesalers are paying Tk 25 per kg at present.

"I will start selling the crop when the price reaches Tk 30 to Tk 35 per kg at wholesale," he added.

Data from the Trading Corporation of Bangladesh (TCB) shows that the price of potato has increased by up to Tk 15 per kg, or 59.57 per cent, over the past month.

Mokhlesur Rahman, a wholesaler based in Karwan Bazar, one of the biggest kitchen markets in Dhaka, said the price of potato was between Tk 860 and Tk 880 per maund (37 kgs) before Eid-ul-Fitr.

But the same amount is now being sold for Tk 1,160 to Tk 1,180 as supply is not available as per the demand, he added.

As per TCB data, potato prices in Dhaka have increased by 108.33 per cent year-on-year from around Tk 16 to Tk 20 per kg in May of 2022.

The potato season starts in October and continues till March, farmers say.

Nur Islam, a farmer of Sadarpur village under Dinajpur sadar upazila, said he cultivated potato on 1.5 acres of land this year but failed to secure a profit despite getting good yields.

"I sold each kg of potato at Tk 12 as the market price was low at the time of harvest," he said, adding that higher production costs attributed to his lack of profit.

Fertiliser, electricity, transport, labour and other associated costs have risen this year due to the ongoing US dollar shortage and other economic crises stemming from the Russia-Ukraine war.

Mostafa Azad Chowdhury, president of the Bangladesh Cold Storage Association, said the price of potato has increased amid fears of a potential supply crunch in the market.

Chowdhury estimates that potato production was about 20 lakh tonnes less this time compared to last season.

In March, traders came to know that potato production could be less than the demand this year and so, they are not properly supplying the market in hopes of getting higher prices later on, he added.

As per an estimate by the Bangladesh Cold Storage Association, growers and traders have kept about 50 lakh tonnes of potato in cold storage this year.

Of the total production, 80,000 to 85,000 tonnes are used by homes and industrial consumption while some 7.5 lakh tonnes are used as seeds.