Why potato prices are skyrocketing

Farmers in Bangladesh do not get a fair price for their produce. Again, consumers of agricultural products suffer because of high prices of any product throughout the year. The price of onions, green chillies, eggplants and other vegetables are usually high. ‘Onion stock’ is a widely used phrase in the media. Last year there was a lot of hue and cry about the unusual price of onion. This year too, onions have already made headlines, as prices have risen.

Apart from onions, the price of potato skyrocketed this year too. According to the government agency TCB, the market price of potato has gone up to Tk 40-50 per kg. At this time last year the price was Tk 20-25. In other words, the price of potatoes has increased almost 100 per cent as per the government. But media reports including Prothom Alo show potatoes are being sold at Tk 50 to 55 per kg at the time. This is a very unusual as the price of potato should not go more than Tk 30 per kg at this time of the year.

This increase in the price of potatoes is also quite significant. Potato can be said to be one of the major vegetable items in Bangladesh. Especially for low-income people, who cannot afford to buy the required amount of vegetables, they are most dependent on potatoes as a vegetable. The families will face a huge financial crisis if the basic vegetable like potato is to be bought at Tk 50 to 55 per kg especially when the market price for all kinds of vegetables is quite high.

The question is what could be the reason for such an unusual increase in the price of potatoes at this time of year. First, after the outbreak of the COVID-19, lockdowns, long public holidays, halt in economic activity, loss of livelihoods of large numbers of people have led to the need for food aid for the poor. Potatoes were one of the items on the list of relief items distributed by the private sector. Thus a lot of potatoes have been distributed.

Apart from that, potato exports have increased a lot in the current financial year as compared to the previous year. In the three months from July to September last year, potatoes worth USD 336,000 were exported. In the three months of July-September this year, potatoes worth 10 million have been exported. One of the reasons for the increase in potato exports is the government's 20 per cent subsidy. Due to this, potato exporters have been encouraged to increase exports.

When the prices of all kinds of vegetables are quite high in the market, if the price of potatoes goes up further, the low-income people will suffer the most. They will even have deficiency of necessary nutrients. In this situation, it is necessary to take steps to stabilize the potato market.

The government's Department of Agricultural Marketing set the price of potatoes last week. At the cold storage level, it has fixed Tk 23 per kg, wholesale Tk 25 and retail Tk 30. But the traders did not accept it. Regular monitoring is needed to enforce the prices set by the government.

Besides, TCB can take initiative to buy potatoes and sell them at lower prices. Exports may be temporarily suspended or export subsidies may be lifted to ensure adequate supply of potatoes to the domestic market.

Either way, the price of potatoes should not be allowed to rise.