Grasp all, lose all

Lured by the prospects of excessive profits, some cold storage owners gave potato farmers and merchants loans and also kept huge stocks, which has now become a burden for them as the goods remain unsold.

Bangladesh Cold Storage Association (BCSA) Executive Secretary Mozammel Hoque Choudhury said around two lakh sacks of potatoes in different cold storages across the country remain unsold. But storage owners said the figure would be much bigger.

Sources said Dewan Cold Storage in Munshiganj Sadar has around 50,000 sacks of unsold potatoes, Samrat Cold Storage in Sirajdikhan around 20,000 sacks, and Anam Cold Storage 8,000 sacks.

BCSA President Mosharraf Hossain told The Business Post cold storages in four districts – Munshiganj, Cumilla, Rangpur, and Chandpur – mostly have unsold potatoes.

“Many cold storages have 5,000-10,000 sacks of unsold potatoes each. Of the country’s 400 cold storages, 74 are in Munshiganj,” he added.

Md Shohidul Islam, manager of Anam Cold Storage, told The Business Post new potatoes have arrived in the market, causing previously-stored potato prices to fall by Tk 5-6 per kg.

That is why farmers and merchants are not interested in releasing their potatoes from storages now, he said.

“If they do not release the potatoes, cold storage owners will sell those to collect storage rents. As the quality of the potatoes has already fallen, they have become cattle feed. Also, there is no hope that merchants and farmers will repay their loans,” he explained.

This correspondent recently visited several cold storages in Munshiganj and found potato prices have declined by Tk 5-6 per kg.

Potato production cost is Tk 16-17 per kg while storage expense is Tk 2 per kg. Thus a farmer needs to sell his produce at a minimum of Tk 18 to avoid losses. But farmers and merchants are not interested in releasing their potatoes from storages and repaying the loans as prices have fallen.

Why potatoes remain unsold

Last year, rain damaged the first batch of seedlings in many places of Munshiganj and Chandpur districts. Farmers then had to prepare the land for a second time and were compelled to harvest their produce late. On the other hand, farmers in northern districts harvested on time.

“When farmers in northern districts started harvesting early, the cold storage owners in Chandpur and Munshiganj bought potatoes from them as the vegetable was yet to be harvested in the two districts. They also gave loans to lure merchants and farmers for storing the potatoes in their storages,” the BCSA president said.

“But cold storage owners failed to predict how the situation will turn out. They wanted to recoup the losses incurred in the previous year by stocking more and for a longer period in 2022.

“They gave loans of Tk 300-500 per sack to merchants. They thought prices will go up, but that did not happen,” Mosharraf explained.

He said cold storage owners gave loans to farmers and merchants so that the latter can bear around 60-70 per cent of the cost needed to bring potatoes to the storages.

“These potatoes have not been sold. To release these goods from the storages now, farmers and merchants need to pay rents and also repay the loans, but they are not interested in that,” he further said.

There is an unwritten rule that if farmers fail to repay loans, they can surrender the stored potatoes to the storage owners. In that case, they will get nothing. On the other hand, storage owners will not receive rents and loan repayments either.

Abdul Qaiyum, a farmer in Munshiganj’s Sreenagar, said he produced around 4,000 sacks of potatoes and stored them in a cold storage.

“I sensed that there could be problems, and that is why I sold the potatoes by a small profit margin. But still I have several hundred sacks of unsold potatoes, which may cause me to incur losses for the last season,” he added.

Abdul Malek, manager of Tongibari Cold Storage, told The Business Post, “We did not give loans to merchants and farmers. This is because we predicted there would be a mess. That is why we did not store potatoes for long either.”

Meanwhile, potato production is increasing gradually while exports were down in the last few years.

“Japan is not importing our potatoes. Sri Lanka is a good market, but we did not export there considering the economic turmoil they are facing. Exports to Malaysia were also hampered. To reduce wastage, exports must be increased,” the BCSA president said.

According to different estimations, Bangladesh produces 1-1.14 crore tonnes of potatoes every year while the demand is 70-80 lakh tonnes.

A ray of hope

Though prices were low last week, they are now increasing as fog has disrupted the harvest and transportation of new potatoes from the northern districts. Storage owners hope this is a chance to reduce the unsold stocks in the next few days.

Anam Cold Storage Manager Shahidul said prices were Tk 250-300 per sack.

“Due to disruptions caused by fog, new potatoes have not arrived, and that is why prices have reached Tk 450 per sack. Cold storage owners, farmers, and merchants have the chance to reduce the unsold stocks in the next one week as prices have increased,” he said.

Md Obaidur Rahman Mondal, deputy director of the Department of Agricultural Extension, said the early-harvested potatoes from different northern districts started arriving in the market in mid-November last year.

He said potato harvests will continue till March this year.

Last year, a huge amount of potatoes were wasted and prices fell to Tk 3 per kg. Farmers and merchants were not interested in releasing potatoes from storages, and storage owners later sold those as cattle feed.