Large traders have hiked prices of potatoes to make windfall profit on speculation that fresh harvest of the crop would hit markets late due to delayed planting, thanks to unusual rain.
On average, retail prices of potatoes increased by 33 percent to Tk 28-32 a kg from Tk 20-25 a month ago in Dhaka, according to data of Trading Corporation of Bangladesh.
Consumers outside the capital also had to count extra bucks for potatoes, as a section of big traders and farmers and cold storage operators increased prices at cold storage level by taking an unfair advantage of depleting stocks and speculation of late arrival of fresh harvests, alleged small traders.
This year’s late rain in November affected planting of potatoes and standing crops in fields. This led to the speculation that harvests of the most consumed vegetable might be delayed.
New potatoes usually arrive in markets in mid-November, but this year it might be delayed by 15 to 30 days, said farmers.
To capitalise on the shortage of supply, a section of traders in the producing zones became very active in buying potatoes from cold storages and wait for a few days to make hefty profits.
Mohammad Hossain, manager of Panchashar Cold Storage in Munshiganj, said prices of potatoes soared to Tk 1,800 for each 80 kg sack in the last few weeks which is quite unusual. On October 24, the same quantity was sold at Tk 1,100.
Seeking anonymity, a senior official at the Department of Agricultural Extension (DAE) said planting of tubers might have been delayed for 7 to 10 days due to rain.
Businesses were aware that the demand would be met from old potatoes for some more days as small farmers sold out their produce long ago. Big fishes, particularly some cold storage operators, capitalised on that, he added.
Around 46 lakh tonnes of potatoes, including tuber potatoes, were stored in 385 cold storages across the country this year, said Jasim Uddin, chairman of Bangladesh Cold Storage Association (BCSA).
Of the stored crop, around 25 percent is still in cold storages. A large portion of it would be used as seeds for cultivation, he added.
Some 10 lakh tonnes of potatoes are used as seeds each year and the rest is used for home consumption, industrial processing and export, according to the BCSA.
In the 2015-16 fiscal year, potato production rose to 94.74 lakh tonnes from 92.54 lakh tonnes a year ago, according to Bangladesh Bureau of Statistics.
Jasim said prices were supposed to drop with the arrival of new potatoes in the market, but the unusual spell of rain caused damages to potato plants which were planted for early harvest.
The prices were further fuelled by the recent depression in the Bay of Bengal, said Jasim, adding that wholesale prices of potatoes shot up to Tk 1,800 each 80 kg sack from Tk 1,000.
Asked about the reasons behind the spike in potato prices, he said prices of other vegetables were also higher.
“What is the problem if you buy potatoes for Tk 30 a kg?” Jasim questioned.
The BCSA leader said there would have been a surplus potato crop this year had there been no untimely rain.
“We wrote to several ministries earlier, sharing our views with them about the stocks. Exports of the crop were also low this year,” he added.
Asked if there was any syndicate of traders behind the price spiral, he claimed there was none.
“Those who invested in the business had incurred huge losses previously. They will certainly try to recover losses.”
Jasim said large farmers, who also stock potatoes, were not coming to cold storage operators to sell their produce. “They are much smarter than anybody else.”
According to him, the current stocks of cold storages would be enough to meet local demands until December when fresh crops would be harvested. He hoped the prices would not rise further till then.
Farmer Badsha Mia from Bogra’s Shibganj upazila said last month’s rain damaged huge standing crops and potato seedlings in the district.
Azizul Islam, a potato grower in Dinajpur, said new crops usually arrive in markets in mid-November, but farmers could not start cultivation in time due to rain.
Traders also blamed the price spiral of potato on the increased demand due to comparatively higher prices of other seasonal vegetables.
The DAE official said the market might see an increased supply of fresh potatoes from the country’s North by the middle of next month.
Hedayetullah Al Mamoon, senior secretary at the commerce ministry, said they did not have any information whether anyone capitalised on the delayed arrival of new potato crops in markets to hike the prices.
“The market has its own dynamics. But we are monitoring to see whether there is any syndicate of businessmen,” he said.
The DAE set a target to cultivate potato on 4.75 lakh hectares of land in this season. Until November, farmers planted tubers on 0.05 lakh hectares, according to the department.
Our correspondents in Munshiganj, Bogra and Dinajpur contributed to this report.