Potato prices could become unstable

The worries of consumers are now potato farmers' worries too. The news is that the price of potato seeds has increased to Tk90 per kilogram (kg). This is a major shift in prices upwards from last year when seed prices were Tk55 per kg, an increase of nearly 64 per cent! Agro-experts state that 160-165 kg of potato seeds are needed to grow potatoes in 33 decimals of land and if prices remain at this level, production cost may increase by Tk2.0 per kg in the next potato season.
Needless to say, potato is a major staple for every Bangladeshi consumer. No curry is complete without it and mashed potato is a regular fare on the table for the average consumer. Hence, the tuber crop features large in the daily diet for Bangladeshis and to think that any price increase will be sorely felt at retail level by consumers who are already at wits end trying to balance their food purchases. Year-on-year data portrays a picture of high rise in price of potato which is now retailing at a record price of Tk 45 a kg.
According to a report published in the Financial Express last week, Nilphamari district produces about 60 per cent of the early variety of the local potato "known as desi red, desi lal or pakri" that is due to hit the market in November. Unfortunately, in Bangladesh, the percentage point increase in cost of production is usually followed by a much greater rise in the price of an item at retail level. Farmers are predicting a 50 per cent rise in cost of production, and it could lead to a much bigger jump in prices that consumers might end up paying during the next potato season. Since earlier seed stocks that were in cold storage have already been sold to farmers over June-July period, farmers are now dreading having to pay the inflated prices.
Indeed, this is the scenario across the board and there are allegations that some major seed companies are not selling seeds to farmers. Perhaps there is some unethical collusions here as have been noticed all throughout the last year by major players withholding supply in various supply chains of food commodities in an effort to drive up prices. The Bangladesh Agriculture Development Corporation (BADC) admits that there is a shortage of potato seeds this year. However, simply stating a shortage and letting things go out of hand would be a recipe for disaster. And, although the BADC has announced that it has a target of selling sufficient quantities of seed potatoes, it would be prudent to source the target amount from abroad, if necessary, to not end up with a market situation that private sector operators can manipulate to drive up prices.
There appears to be a dearth of data about precisely what the production of potatoes has been this year. The Bangladesh Bureau of Statistics (BBS), has apparently not published any data on this. Unless there is reliable data, it is difficult for policymakers or authorities like the BADC to predict what sort of shortfall may plague farmers. Traditionally, farmers have held 80 per cent of potato seeds but that scenario looks to change this year. The government needs to take measures now to meet demand for potato seeds for the upcoming season and keep prices stable.