Potato Imports to Stabilize Prices
Indians may soon find potatoes from Bhutan on their plates. The Indian government is considering importing the vegetable due to anticipated price increases caused by lower production this year.
A senior government official, speaking to The Economic Times on condition of anonymity, mentioned that apart from Bhutan, the Indian government is also exploring imports from other countries. The official stated that traders would soon be allowed to import small quantities of potatoes to manage the shortfall.
Weather Woes and Production Challenges
India, the second-largest producer of potatoes after China, relies heavily on key potato-producing states such as West Bengal and Uttar Pradesh. This year, these states experienced inclement weather, damaging the potato crops and causing prices to surge.
“Prices of potatoes are expected to be firm for the next few months,” an agricultural analyst said, noting that the shortage might be felt as early as October, which is earlier than the usual November-December trend.
A trader, also speaking anonymously, highlighted that large farmers and traders are already holding their stocks in anticipation of a price rise in the coming months. Additionally, loading in cold storages has declined this year, contributing to the anticipated shortage.
Potato Output and Disease Risk
According to the first advance estimate from the agriculture ministry, potato output is expected to be around 58.99 million tonnes this year, down from approximately 60.14 million tonnes last year. The Central Potato Research Institute has also warned farmers about the high risk of late blight disease, a fungal infection exacerbated by changing weather conditions.
Impact on Food Inflation
Food inflation in India soared to 9.4%, driven primarily by the consistently high prices of vegetables. Inflation in tomatoes, onions, and potatoes collectively rose to 48.4%, with onions and potatoes leading the surge.
Government Measures and Previous Imports
To address the issue, the Indian government had previously approved importing potatoes from Bhutan without any license until June 2024. In the fiscal year 2022-23, India imported fresh or chilled potatoes worth $1.02 million from various countries.
By importing potatoes from Bhutan and other potential sources, the Indian government aims to stabilize the market and ensure that prices remain manageable for consumers. This strategic move is essential to mitigate the impact of lower domestic production and to keep food inflation in check.
(With inputs from agencies)
