Traders, storage owners betting on potato

Potato farmers and traders in Munshiganj are buying potato from their peer groups in Northern districts at a higher price and storing the produce in different cold storages in Munshiganj.

In a recent show of event, eight trucks filled with potatoes from Northern districts were seen to wait in front of Srinagar Cold Storage at Srinagar upazila in Munshganj.

Of them, one truck with 14 metric tonnes of potatoes came from Joypurhat. The owner of the freight is one Mohammad Opu, a local potato trader in Munshiganj.

“I bought per kilogramme of potato at Tk 14. I had to spend Tk 2 on transportation cost of per kg potato while cold storage owner will charge Tk 4 per kg as rent. Thus per kilogramme potato cost goes about Tk 20,” Opu said.

“I have to sell at more than Tk 20 a kg at cold storage gate to make a profit.”

There are more than 400 cold storage across the country. Of them, 74 are alone in Munshiganj. Trucks were found queuing up in front of all cold storage.

A trader Jamil Bepary bought 1,550 sacks (Per sack contains 50kg potato) of potatoes from Rajshahi and is storing them in Anam Cold Storage at Sirajdikhan upazila in Munshiganj.

“I bought 1,000 sacks of potato for Tk 14 per kg and 550 sacks for Tk 11 a kg; besides, I produced 300 sacks of potatoes in my own land – all are being preserved in cold storage. My production cost exceeded Tk 14 per kg,” said a hopeful Jamil.

All they are doing is take risk, assuming that the price will go up which will help them chalk up a good profit.

Potato price is expected to be high this year as its production got hampered due to rain. Moreover, in the business one has to take some risks without which there will be no gain, explained Jamil.

However, rain did not spoil potato that much across the country. The Northern district was not affected by the shower. Moreover the productivity is high in those regions.

Sources said 350 maunds of potato were produced in one Kani (140 decimal land) in Munshiganj while around 550 maunds in the same amount of land in Northern regions.

Cold Storage owners say around 25 per cent of the stored potatoes is coming from Northern districts, but in reality their portion is much higher than what the cold storage owners are saying.

Shamrat Cold Storage has a storage capacity of 1.60 lakh sacks of potato. So far 60,000 sacks have been stored. Of them, a majority of potato comes from Northern regions.

“Around three fourths of potatoes came from North,” Shamrat Cold Storage supervisor Abdul Aziz said, arguing that cold storage owners are also giving loans to local traders for bringing potatoes from outside the district.

Loans ranging from Tk 100 to Tk 300 against per sack of potato are being given to the traders on condition that the potatoes should be kept in their storages.

A cold storage with a capacity of 1.20 lakh sacks needs Tk 1 crore in electricity bill per year. The utility bill will be the same whether the storage is full of not.

“No one wants to bring potato without loan. It seems loans need to be given against 90 per cent of sacks. We are giving loan up to Tk 300 per sack,” said Aziz.

Last year farmers and traders abandoned around 17,000 sacks of potato in Shamrat Cold Storage due to the low price of the produce.

Alongside cold storage owner in Munshiganj, owners across the country are also giving loans to farmers and traders.

According to the Bangladesh Cold Storage Association, 1.5 lakh sacks of potatoes remained unsold in cold storage of different districts including Munshiganj last season when around 1.10 crore metric tonnes of potatoes were produced across the country.

This year it is assumed that potato production will go around 1 crore metric tonne.

The country has a demand for 80 to 82 lakh metric tonnes of potato and 7 to 8 lakh metric tonnes are used for preparing seed. Thus, 20 lakh metric tonnes of potato remain unsold each year, said the association president Mosharaf Hossain.

Farmers are also not interested in selling their produce at the throwaway price. Rather they like to store them for several months.

“The cultivation cost of potato increased by 50 per cent due to rain in December. I had to sow seeds again and apply fertilizer and pesticide that shot up the production cost to Tk 14 per kg, but no traders are willing to pay more than Tk 14 for a kilogramme of potato,” a Srinagar farmer Mozammel Alam told The Business Post.

“In Northern districts, the production cost is less than Tk 8 for per kg potato whose quality is also good. So, there is no way but to store the essential commodity for future price hike.”

Asked how the northern farmers are selling at Tk 14 or less for per kg potato, growers from both areas said due to rain, output decreased by 40 per cent in Munshiganj compared to that in North Bengal.