An analysis of Market Arrival and Price Behavior of Potato in India

Sreepriya P.
Journal article Economic Affairs • March 2020

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Potato is an integral part of the global food system and the world’s number one non food grain commodity. During 2018-19 potato acreage in India was 21.84 lakh ha with a production of 52.58 million tonnes. Major potato growing states are Uttar Pradesh, West Bengal, Bihar, Gujarat, Madhya Pradesh and Punjab. Prices of potato exhibit both inter-year and intra-year variations. This price fluctuation in potato is a major concern among farmers, consumers and policy makers. The current study is an attempt to analyze the behavior of prices and arrivals of potato in the major markets of India. The time series data on the price and arrivals of potato in the major markets of leading producing states were collected from Agmarknet. The data corresponding to the potato prices in future market were collected from MCX (Multi Commodity Exchange of India Ltd.) where it has been traded till 2014. The prices of potato significantly increased over the last ten years compounded annually in all the selected markets. Significant positive growth rate of arrivals was found in Agra and Ahmadabad markets and negative growth rate was found in Jalandhar market. The price and arrivals series have shown significant negative correlation in all the markets. Seasonal indices depict that prices of potato are usually high during the months of October to December and starts declining till April which is in par with the post harvest period of the crop. Price discovery of potato is a complex process and is affected by a number of factors like production, total arrivals, lagged price, future prices, which have been quantified here and other factors like transportation, storage, weather uncertainties and pests and disease attack.




Economic Affairs

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