Potato price surge defies reason

The recent surge in potato prices has reached levels that defy logic. Despite a good harvest and an apparent lack of visible supply constraints, potato prices have soared. A dietary staple with versatile uses, potato holds a critical place in household budgets. So any increase in the cost due to scarcity or suspected market manipulation affects a vast majority of the people, raising concerns about affordability and food security.

What appears puzzling is that official data suggest a surplus in potato production, which should theoretically stabilise or lower prices. Reports indicate that the country produces over 10 million tonnes of potato annually, with a surplus of about 1.0 million tonne over the maximum demand, estimated at 8.5 million tonnes (including 0.8 million tonnes for seeds). According to agriculture ministry, production rose by 0.3 million tonnes last year to reach around 10 million tonnes. Yet, potato prices continued to rise months after the harvest season, casting a doubt on the accuracy of production data. Data from the Bangladesh Bureau of Statistics (BBS) and the Department of Agriculture Extension (DAE) further add to the mystery. They show that the area under potato cultivation has been expanding consistently, with production reaching 10.09 million tonnes in 2023. Despite this steady increase, supply still appears misaligned with demand, suggesting that official figures may not fully capture actual production or consumption dynamics. Without precise data, understanding the root of price instabilities becomes challenging, rendering solutions to ease concerns nearly impossible.

One possible factor affecting the market could be post-harvest wastage, particularly in areas with insufficient cold storage facilities. Besides, high storage fees charged by cold storage owners may lead to spoiling of a large quantity of potatoes each year. However, the extent to which wastage influences prices remains unclear, underscoring a need for better data on both storage capacity and spoilage rates. Thus addressing the persistent imbalance in the potato market will likely require a reassessment of actual demand and a more accurate estimate of annual production and wastage. Comprehensive and reliable data are essential for tracing the problem and finding ways to protect both consumers from inflated prices and farmers from market uncertainties that have, for too long, been a recurring issue.

The underlying causes of the potato price surge may also include complex dynamics in the supply chain, particularly the role of intermediaries and possible market manipulation by syndicates. There have been allegations that traders or storage facility owners may artificially restrict the supply to push prices higher. Such tactics can distort market prices, leading to artificially high costs even in times of surplus production. Strengthening market monitoring and regulating storage practices could prove highly effective in preventing irrational price spikes. Increased transparency within the supply chain, from production to sale, might also help identify potential bottlenecks or exploitative practices. A combination of policy reform, better data collection, and proactive market interventions will be necessary to address the systemic issues impacting potato prices and protect both consumers and farmers from the resultant economic crunch.