Govt doesn8217;t know its potatoes either!

NEW DELHI, Nov 2: Confused about the fluctuations in the vegetable market? You aren't alone. Even the government and its Committee of Secret...

NEW DELHI, Nov 2: Confused about the fluctuations in the vegetable market? You aren8217;t alone. Even the government and its Committee of Secretaries CoS on prices seem equally mystified, judging by the instructions issued by the CoS.

A fortnight ago, the CoS directed the Ministry of Commerce to find export markets for potatoes. Its communication said that the issue had been discussed, that there was about to be a glut of potatoes in the market, that this was an exigent situation and that export markets should be identified by the Ministry.

Yet, even before letters had been sent out to overseas missions asking them to identify foreign markets for India8217;s apparently over-abundant potatoes, a different-and contrary-set of instructions arrived from the CoS.

Not only were those letters not to be sent out, after all, the imperative now was to identify countries from where potatoes could be imported!

Just what caused the panic buttons to be pressed about impending over-supply is not clear when less than twoweeks later it became apparent that short supply and not over-supply was the problem.

Nor is importing potatoes as simple as might be imagined, given the state of international prices and supply. Seasonally, Europe is the place at this time of the year to import potatoes from, Germany and Poland being the two main countries.

Yet potato imports from these countries, after accounting for all costs, would be two to three times current Indian prices by the time they landed here, making their viability suspect.

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Consider that Indian explorations of the possibility of onion imports from Dubai immediately put up onion prices by 50 per cent. India after all is the second largest producer after China, others countries producing downwards of 20 lakh tonnes to India8217;s 40 lakh tonnes in a normal year.

A much better prospect for potato prices easing is the arrival of the early kharif crop in December, when about 20 per cent of the total annual output arrives in the market. Another 20 per cent of the total annualcrop arrives around January-February.

As to the ban on potato exports, its beneficial impact on the domestic market and prices is mostly psychological and an indication of government resolve to keep a lid on prices. Total annual potato exports are a paltry 35,000 tonnes.