Potato Short Note. 31 Jan Introduction. Seasonality

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1 31 Jan 2008 Potato Short Note Introduction Potato is the world's fourth important food crop after wheat, rice and maize because of its higher yield potential along with high nutritive value. With an annual global production of about 300 million tonnes, potato is an economically important staple crop in both developed and developing countries. India ranks 4 th in terms of area and is the 3 rd largest country in world in production of potato after China and Russian Federation. Seasonality In India, more than 80% of the potato crop is raised in the winter season (Rabi) under assured irrigation during short winter days from October to March. About 8% area lies in the hills during long summer days from April to October. Rainy season (Kharif) potato production is taken in Karnataka, Maharashtra, HP, J&K and Uttranchal. In major parts of China (which is one of the leading producers) potato is harvested in the month of October to December and in few regions it is harvested in month of May July. Summer crop- March- April August-September Autumn crop- August-September December- January Spring crop- January - February May-June In Plains Uttar Pradesh West Bengal Bihar Punjab Karnataka May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr In Hills Uttar Pradesh Gujarat Assam Aug Sep Oct Nov Dec Jan Feb Mar Sowing Growth Stage Harvesting

2 International Scenario Potatoes are grown in about 150 countries throughout the world and more than a billion people worldwide eat potato. About million tonnes of potato are produced in the world over an area of about million hectare. World Potato Area, Production and Yield 30,000 25,000 20,000 15, , , , , , , , , , Area harv('000 Hac) Production ('0000 Mt) Yield (Hg/Ha) The top ten producers in the world are China, Russia, USA, Ukraine, Poland, Germany, Belarus, Netherlands and France. These together contribute about 70% of the total production. India ranks third contributing around 7.5% to the world s production. Production wise India has always remained in the top ten since last twenty years. Percentage share in production 10% 6% 6% 36% 10% 13% 19% China Russia India Ukraine USA Germany Poland

3 Domestic scenario India is the third largest producer of the potato; it contributes around % to the total global production. From above graph, we can infer that area and production since last decade are more or same around 1.3 million ha and million tonnes. During , area under potato is around 1.42 million ha increased by 6.1% over previous year of 1.32 million ha. Production also witnessed an increase of 1.18% from million tonnes to million tonnes. 25 Area, Production and Yield under Potato in India during to Area & Production Yield Area(million ha) Production ( Million tonnes) Yield( Kg/ ha) The average yield rate per hectare in India is quite low that stands at 18 tons per hectare. In , productivity was high that is nearly 20 tonnes due to use of high yielding varieties supported by favorable weather conditions. In later year, productivity has come down to its average yield of 17 tones. Output (Million Tonnes) Potato Production in India

4 From the above graph, we can interpret that potato production continuously on increasing trend on rising demand from food industries on emergence of a fast food and snacks sector in recent times. During last decade, production was hovering on an average around 23.5 million tonnes. Production is expected to be around 30 million tones, which is higher by 11.11% compared to last year of 27 million tonnes. Uttar Pradesh 34% Share of Potato production in India Others 8% Karnataka 2% Assam 2% MP 3% Gujarat 3% Punjab 5% West Bengal 24% Bihar 19% India ranks third in potato production in the world. In India, major share to the production contributed by Uttar Pradesh around 34% followed by West Bengal (24%) and Bihar (19%). These three states account to 77% of total domestic production. Punjab, Gujarat, Madhya Pradesh and Karnataka these states contribute in minor quantity. Though Uttar Pradesh state has the highest potato production level in the country, it does not enjoy the highest productivity level, which is bagged by Gujarat. 350 Monthly Wholesale Price Index of Potato Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5 Like other agri commodities potato also follow seasonal pattern in prices. The above graph indicates the wholesale price index of potato witnessing prices are in peak level during October and November months. Due to decline in arrivals supported by rising demand.from Mid of December onwards prices slowly starts tumbling due to stockiest off load their old stock in the wake of fresh arrivals in February month. After March, onwards prices gain momentum in smaller pace till October due to through out demand for potato. Current scenario According to reports, rabi sowing of potato has increased by 15-20% in major growing states National Horticultural Research and Development Foundation (NHRDF) estimated potato output at 30 million tonnes in this year increased by 11% from 27 million tonnes in last year Potato output in West Bengal estimated at 70 lakh tonnes in this season Cold waves and frost conditions in northern states in the last few weeks (during January) reported to have damaged the standing crop According to sources, about 10-15% of crop has been damaged in growing areas due to prevailing bad weather conditions, however final estimates of crop damage is yet to come These concerns of crop loss led to sharp rise in prices in the past few weeks, where potato prices gained by Rs.150 per quintal at exchanges during January month Arrivals likely to increase from second week of February and extend till March in Northern states Prices are likely to come under pressure during peak arrivals in February, however further deterioration of weather conditions may limit the down fall Currently spot prices at Agra, a major trading centre for potato quoting at Rs per quintal and these prices are likely to come down by Rs per quintal during the month of February

6 Potato- March- MCX: Technical Approach The Most active March contract prices have surged from Rs.490 to Rs.602 levels witnessing 22% appreciation in prices. Current levels shows overbought, as RSI (14) is at 0.70 levels. Technical chart shows a rising wedge (trend reversal) pattern in daily chart which may lead to decline in prices in the short to medium term. The immediate support can be seen at Rs.575 (23.8% retracement of levels). On break of 575, prices may correct further towards 544 (61.8% retracement) and then 530 levels. However, the resistance can be seen at 600 and then levels. Expected Short term Trend ( ), Preference/ Strategy: Short Weekly Pivot point 587 * Major Supports: 573 then 553, Resistance: 597, 605 Recommendation: Sell around targeting 555 then 530 stop loss above 635

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