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Intriguing price spiral of potato

Wasi Ahmed | October 04, 2023 00:00:00

However peculiar it may seem, potato of all the edible consumer products, ranking very high given its use in most households on an almost daily basis, is often weighed down by unpredictable market behaviour. In times of bumper harvest, it is the farmers who suffer most -- not being able to get fair price. Besides, wastage takes a toll for lack of proper and required storage facilities. The strange thing is that excess or sufficient production barely ever reflects itself in the retail market. Even there are occasions when despite fairly good harvest, the market gets heated. This year's case is a glaring example.

There are scores of issues relating to potato -- from sowing seeds to harvesting to storing and marketing. For consumers it is the unpredictable, even irrational price spiral that they are concerned about. Good harvest or not, abnormal price hike is a common phenomenon, and the government finds it convenient to put the blame on hoarders who allegedly work under a country-wide syndication.

With the price hike of potato wreaking havoc on ordinary consumers all over the country, the response of the government comes in the form of devising plans, which for the most part are short of ideas and hence not practical enough to address the crisis. On the other hand, when it comes to proper storage, there is also no dearth of plans. One may recall that last year when huge quantities of potatoes were getting wasted, the authorities announced for setting up Potato Centres for proper preservation, development and boosting export of potato. No doubt the initiative sounded fine on at least two counts: saving huge quantities of potatoes from rotting at farmers' yards and godowns, and facilitating export to target markets. It had been gathered from newspaper reports that the decision came at a meeting of the agriculture minister with a delegation from the International Potato Centre (CIP). The CIP, based in Lima, Peru deals with a whole package of potato preservation, pest-free quality assurance, and has research presence in more than twenty countries in Africa, Asia and Latin America with special focus on various grades and types of potatoes. The delegation led by the Regional Coordinator of the CIP offered cooperation for setting up potato centre in Bangladesh. The government, on its part, has readily agreed to provide necessary land for setting up the centre to help develop varieties of potato and scientific preservation. This happened more than a year ago, and as ill luck would have it, there is no further move as of now.

This year's potato price surge is four year's high. The price has risen to Tk 45-55 a kilogram in Dhaka and other parts of the country in recent weeks. The current price is more than 61 per cent higher than a year ago. In response, the government's move to collect information on stock record of potatoes from the private cold-storage facilities in the country sounds rather simplistic to rein in price hike. A FE report says the commerce ministry has instructed the Bangladesh Cold-Storage Association (BCSA) to provide stock records for the last three years, from 2021 to 2023. The purpose of such a move is believed to obtain a picture whether sufficient quantities have been released from the cold-storages to meet market demand. This may lend a picture whether it is short supply, in other words, hoarding that is causing the artificial crisis. What, however, remains to be said is that if it is a syndicated arrangement, as suspected, to raise prices all over the country, stock-taking may end up as an exercise confined to itself.

There is apparently no causal link between production and market price of potato. In August 2020, potato prices reached an all-time high of Tk 60-65 per kilogram. But the agriculture ministry claimed a record production of 10 million tonnes -- more than a million tonnes than annual country demand. The maximum demand for potatoes in the country is 8.5 million tonnes including 0.8 million tonnes for seeds. This year production has increased by 0.3 million tonnes to 10.4 million tonnes, according to BBS data. Despite the increase in production, traders have raised prices nearly two-fold in just four months without any apparent reason.

The Bangladesh Bureau of Statistics (BBS) data show that over the years, despite losses incurred by farmers, land area for potato cultivation has been on the rise which goes to explain that farmers still prefer to stick to one of their favourite and relatively easy-to-grow crops. According to the Department of Agriculture Extension (DAE), the total land area under potato cultivation has been on the increase since 2012 with a slight fall in 2017. Production, however, has been consistently on the rise reaching more than 10 million tonnes since 2018.

Under the circumstances, isn't it intriguing that irrational price spiral of potato should leave the authorities with no clue to address the matter?

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