Lower Potato Crop, Higher Market Prices – Greenworks

Lower Potato Crop, Higher Market Prices

Potato business is in upswing right now. Rates in domestic market have almost doubled from what they normally are during this time of the year, with international prices recording even higher trend. Exports have risen during the last month. Farmers, traders and exporters are making some good money, say the stakeholders of the supply chain.

The current price spike is driven by exports to Afghanistan and Iran. Afghanistan is also serving the central Asian region and massive re-export is reportedly going on from Iran to Iraq. Iran is exporting its potato to its traditional markets and meeting its requirements from Pakistan. The Dubai market is catering to Saudi Arabia and placing bigger orders for the Pakistani exporters. Of late, the Russians have also allowed import from Pakistan.

This is the context in which potato crop arrived, suffering huge weather losses that kept the yield low. In the last few months, early crop (sown in September) suffered due to the prolonged heat wave that extended till right after the sowing and early springing of the crop. The later (November) sown crop suffered owing to frost early this year when temperatures fell well below the freezing point. Both the factors kept the potato size small and hit the yield by at least 40pc, according to the farmers are to be believed.

What worsened the impact on final yield were high rates during the crop life cycle. Because of high rates, many farmers dug out early-sown potato prematurely this season – somewhere in November – to make good money on them. Though this is a routine phenomenon, but it expanded this year because of better rates. Because of both these factors, the crop size would be around four million tonnes against normal size of six million tonnes. With the domestic consumption ranging between 2.5-3m tonnes, the country could spare only one million tonnes for export.

With crop now mainly out in the market, rates are still hovering around Rs3,500 per bag, against traditional less than Rs2,000 per bag during this part of the season. It has come down from Rs4,700 per bag last week, and was rising again by the time these lines were written. As proven this year as well, the potato is, however, fast emerging as another cash crop for farmers in the central Punjab for the last few years because of better hybrid seeds and high yields. A comparison with other crops makes the point clearer. The national wheat yield average is less than 30 maunds, paddy ranges between 50 to 60 maunds and spring corn between 80 to 100 maunds. The potato yield touches 400 maunds.

The crop has two problems; non-availability of internationally accepted seed and timing of the crop that makes it vulnerable to weather. Most of the farmers import seed, which hugely adds to their cost of production and change the crop anatomy as import makes it a highly expensive business.

On the seed head alone, farmers have to invest over Rs120,000 per acre if import is from Holland and around Rs90,000 per acre in case of India. For the world, it is a summer crop. In Pakistan, it is a winter affair, where extreme weather regularly hits this tender crop hard. With such a heavy investment on this head alone, a slightest damage to yield hurts farmer badly. This necessitates a fresh look at the crop planning, especially for the Punjab that contributes 90 per cent of national production.

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