Heatwave effect: Potato prices likely to remain hot despite monsoon progress
Vegetable prices, especially potatoes, are likely to stay elevated in the near term, despite rapid progress of the monsoon, according to agricultural experts and economists. Heatwaves in several parts of the country this summer damaged crops, causing demand-supply mismatch, they say.
Vegetable inflation remains a major concern for policymakers, reaching 29.3% in June, from 27.4% in May. The increase was broad-based, affecting both TOP (tomatoes, onions, potatoes) and non-TOP vegetables.
«Prices of potatoes are expected to be firm for the next few months,» said an agricultural analyst, adding this year's shortage of the tuber is likely to be felt as early as October unlike the general trend of November and December.
For potatoes, weather-related damages in key potato producing states of West Bengal and Uttar Pradesh have crimped production, fuelling the price increase. Potato output this year is expected at around 58.99 million tonnes, lower than around 60.14 million tonnes last year, according to the first advance estimate of the agriculture ministry. «Large farmers and traders are also holding their stocks in anticipation of price rise in the coming months,» said a trader, adding loading in cold storages was also comparatively less this year.
Apart from potatoes, prices of other vegetables are also expected to remain higher though changes in year-on-year inflation rates across items will be influenced by the base, said Aditi Nayar, chief economist and head — research and outreach at ICRA. «For instance, in the
