POTATO SEASONAL REPORT

Potato Supply
-

Outlook

Reasons
Good crop in Hasan 30-35% available stocks No significant increase Increased supply for short term

Demand Price

August-September Rs.450 - 480

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_____________________________________________________________________ Potato Seasonal Outlook

otato is the world's fourth important food crop after wheat, rice and maize because of its great yield potential and high nutritive v alue. It constitutes nearly half of the worlds annual output of all root and tuber crops. With an annual global production of about 300

million tonnes, potato is an economically important staple crop in both developed and developing countries.

Season 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 May
Uttar Pradesh

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

West Bengal Bihar Punjab Karnataka

In Hills Aug
Uttar Pradesh Gujarat Assam

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Sowing

Growth Stage

Harvesting

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International Scenario Potatoes are grown in about 150 countries throughout the world and more than a billion people worldwide eat potato. About 328.87 million tonnes of potato are produced in the world over an area of about 19.13 million hectare.

World Potato Area, Production and Yield

180,000 175,000 170,000 165,000 160,000 155,000 150,000 145,000 140,000
20 00 20 02 20 01 20 03 20 05 19 99 20 04

30,000 25,000 20,000 15,000

Area harv('000 Hac)

Production ('0000 Mt)

Yield (Hg/Ha)

Area under potato cultivation is almost constant and same is the case with production. However, there is a slight decline in the yield. 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 worlds production. Production wise India has always remained in the top ten since last twenty years. Europe is the largest per capita consumer, followed by North America and Latin America.

Area Under Potatoes-Country wise ('000 Ha)

5,100 4,100 3,100 2,100 1,100 100 Germany USA Poland 2003 India 2004 Ukraine 2005 Russia China

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World Potatoes Production-Country wise ('000 Mt)

71,000 61,000 51,000 41,000 31,000 21,000 11,000 1,000
US A In dia Uk ra ine Po lan d Ru ss ia
20 02 -0 3 20 03 -0 4

G erm an y

2003

2004

2005

However, there is a slight decrease in area under cultivation in China but there is increment in production. Same is the case with other major countries. Indian scenario India ranks 4th in area and it is the 3rd largest country in world in production of potato after China and Russian Federation. Potato is produced in an area of 14.00 lakh ha with a production of 250 lakh tonnes and productivity of 17.86 ton per ha.

Area under potato in India (1995-2004)

1.6 1.4 1.2 1 0.8 0.6 0.4
19 98 -9 9 19 95 -9 6 19 96 -9 7 19 97 -9 8 19 99 -0 0 20 00 -0 1 20 04 -0 5 20 01 -0 2

Area (Million Hectare)

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Ch ina

Production and Yield of Potato in India (1995-2004)

30 28 26 24 22 20 18 16 14 12 10
19 95 -9 6 19 96 -9 7 19 97 -9 8 19 98 -9 9 19 99 -0 0 20 00 -0 1 20 01 -0 2 20 02 -0 3 20 03 -0 4 20 04 -0 5

21300 19300 17300 15300 13300 11300 9300 7300 5300 3300 1300

Production (Million Tonne)

Yield (Kg/Hec)

Production of potato has remained almost stagnant around 25 million tonnes since 1999 - 2000. Production declined from 25 million tonnes in 1999-2000 to 24.44 million tonnes in 2000-2001 and 2001- 2002 and increased to 26.5 million tonnes in 2002-2003. Potato production declined again to 24.5 million tonnes in 2003-04. In 2004-05 there is an increase in the production to about 25 million tonnes.

Share of different states in total area (2003-04)

5% 6% 10%

4%

3% 3% 32%

11% 26%
Uttar Pradesh Punjab West Bengal Karnataka Bihar Gujarat Others Madhya Prdaesh Assam

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Potato is grown almo st in all states of India. Major potato growing states are Himachal Pradesh, Punjab, Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, West Bengal, Bihar and Assam. UP, West Bengal, Bihar and Punjab together account for about 86% of Indias production. However, potato consumption per capita in India (14.8 kg/head/year) is one of the lowest in the world and hardly 1% of the potato is processed. 90% of the potato crop in India is cultivated on Indo-Gangetic plain from October until February-Marc h.

Share of states in total Production (2003-04)

3% 3% 6% 6% 6% 43% 1% 2%

30% Uttar Pradesh Assam West Bengal Karnataka Bihar Madhya Prdaesh Punjab Others Gujarat

Uses of Potato Potato flour Potato chips French Fries Frozen potato Potato starch Tapioca of potato

In India, processed potatoes currently constitute less than 0.5% of annual production. While the consumption of processed potato products is anticipated to increase, at present, the processing sector is largely comprised of various kinds of dehydrated potato products, starch etc.

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Major exporters Vs Indias export:

Percentage share of exports in production

60 50

Percentage

40 30 20 10 0

Netherlands (ninth in production and the highest exporter and importer) exports around 22-28% of its production. Whereas, India being the third largest producer exports hardly 0.45%. This is because Netherlands has the comparative advantage of weather that allows it to grow varieties that are suitable for further value addition like chips and French fries. The same is the case with Germany and Belgium. But in India the climate required to grow varieties for French fries and chips is not so condusive. But now some varieties like ChipsonaI and ChipsonaII are being developed by ICAR especially. Once these varieties are fully developed they will give a good competition to the European value added potato varieties.

19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03

Netherlands

Germany

Belgium

India

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Export and import price comparison- World Vs India

World and India's import export price
0.4 0.35

Price(1000$ per MT)

0.3 0.25 0.2 0.15 0.1 0.05 0

20 02 ,

Per MT world export price(1000$) per MT India export price(1000$)

Per MT world import price(1000$) per MT India import price(1000$)

The worlds import and export price have gone hand in hand. After 1995 both the import and export prices of world had started falling. But Indias export and import prices have never been close to each other. There is a significant gap between India and worlds price. But both the price has a direct correlation. With rise in worlds export price Indias export price has also increased. After liberalization Indias import price has also moved closer to world import price. Indias export share to major countries: The major countries to which India exports are Nepal followed by Srilanka, Mauritious, Maldives and USA. Nepal shares almost 82%of total exported quantity.

Export Share (2003-04)

5%

6% 7%

82%

Mauritius

Sri Lanka

Others

Nepal

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20 03 ,

19 95 ,

19 96 ,

19 97 ,

19 98 ,

19 99 ,

20 00 ,

20 01 ,

India's Export (Quantity vs Value)

Value(1000$) 80,000 Quantity(MT) 60,000 40,000 20,000 0
19 95 , 19 96 , 19 97 , 19 98 , 19 99 , 20 00 , 20 01 , 20 02 , 20 03 ,

8,000 6,000 4,000 2,000 0

Export quantity (MT)

Value (1000$)

Liberalization was having a great impact on the trade of potatoes as free trade was allowed after that. The pre liberalization and post liberalization trends are quite clear. After liberalization there was almost a four-fold increase in the export. Not only there was an increase in quantity but there was also an increase in terms of value.

Indias Import

Country wise Import of Potato Starch by India

400 350 300 250 200 150 100 50 0
G er m an y De nm ark Ne the rla nd Th ail an d Fr an ce

2002-2003

2003-2004

2004-2005 (April 2004-July 2005)

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India basically imports starch from other countries. Starch is used in noodles and other value added food items. Since 2004-05 the starch import has come down because some Indian industries have also started manufacturing potato starch. The government is also planning to set up a potato starch unit in Faizabad (UP).

Price trends:

Trend in prices in Kanpur Market

750 650 550 450 350 250 150 50 Jan Feb Mar Apr 1999 May 2000 Jun Jul 2001 Aug Sep Oct 2003 Nov Dec

2002

Over the years price has remain at the top during October -November. This is because of lean season with limited availability of supplies from cold storages during these months. The only source is produce from Karnataka which is not able to meet the high demand. Most of the harvest starts November onwards. As more and more produce start arriving in the market prices start coming down. This is evident from December to April when price has remained lower. By April harvesting stops and Potato from cold storage is utilized and by October cold storage is almost empty. This trend is almost similar in all the major potato markets in India.

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Agra market- Arrivals and Prices

550 500 450 400 350 300 250 200 150 100 Aug-05 Sep-05 Nov-05 Dec-05 Jan-06 Feb-06

Arrivals (in Tonnes)

Modal Prices(Rs/Qtl)

Market Influencing Factors Change in acreage depending on yield and price realization Weather condition during tuber formation Demand of potato from food processing industries Comparative price with other vegetables in the domestic market Transportation charges have also great impact on prices Hoarding of potatoes by growers and traders before selling in expectation of better prices

Current status (2006)

Generally production of potatoes is about 25 million tones which is the normal requirement also for the consumption including requirement for seed bulbs, processing industries, export, waste and storage losses etc. Present estimated production is about 24.51 million tones which is little less to meet the demand, which could be compensated by the restrictions on export and also by increasing area under kharif potato production. Presently, In Agra region almost 45-50% of the stocks are already used and only 30% is there for seed purpose. Altogether, taking into account Agra and near by area, stocks remained for coming months for consumption purpose is only 30-35%.

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Prices in the month of Aug-Sep will be governed by arrivals from Hasan market (District in Karnataka) which will start from 15th Aug. Rain in Hassan which is one of the major producing centers will also have impact on the potatoes prices. For this year crop is expected to be in good condition and there will be increase in supply in southern market which will pressurize the prices. The produce from Hasan will cater the market till the end of September after which in the month of Oct Nov there will be again dearth of supply and prices will go up till November. In Northern region, harvesting will start in the month of Nov and fresh Rabi produce will come in the market which will drive the market down in the months of December and January.

Price target Keeping into view the above mentioned factors it is expected that prices of potatoes will come down in the month of August - September to the level of Rs.450 -480 on account of increase in arrivals in the market. From October onwards there will be some increment in prices because of tight supply and prices may again go to Rs.550- 580 levels till November end. August September Rs. 450 -480 November Rs. 550- 580

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