Indian potato processing companies urge government to waive import duty on potato

Indian Potato chip, fries and flake manufacturers have urged the government to waive the 30% import duty on potato to improve supplies and check soaring prices at home.

The demand comes at a time when the government is considering floating tenders for potato imports.

Manufacturers say their stocks of processed potato have almost depleted and they may be forced to shut plants until the new crop arrives in December. "We are requesting the government to waive the 30% import duty," said Manesh Agarwal, MD at Agra-based Bankey Bihari Ji Food Products, which recently tied up with industrialist Ravi Jaipuria to manufacture French fries under the Farmbell brand.

Agarwal said several manufacturers are in talks with Australian and European suppliers to procure processed potato, adding that the tentative landed price of imported potato will be Rs20-24 per kg depending on the quality compared with the current domestic price of Rs25-30.

Himalaya International, which does contract manufacturing of potato products for Reliance Retail, is also looking for opportunities to import the vegetable. "Our US office is in talks with European and Australian companies," said Man Mohan Malik, chairman and CEO at Himalaya International. "Potato availability this year has been less and prices are touching the roof."

A good source of calcium, vitamin C and iron, potato is considered the king of vegetables. India, which is the biggest potato producer after China and Russia, has two million hectare under the crop, with an annual output of 44 million tonne.

Last week, the government had asked Nafed and Small Farmers' Agribusiness Consortium to explore the possibility of importing potato from Europe. The government, however, is focusing on varieties that can be directly used by consumers.

But Sachid Madan, director at Technico Agri Sciences, said there is no need to import potatoes. "The kharif crop has been good and the early rabi crop is also on track and will start from early November. Prices have also stabilised at Rs30 per kg for processed potato and are gradually falling for table potato," he said. Sanjay Murarke, MD at Kolkata based Potato King Foods, said the government should not allow potato exports in the beginning of the season as it leads to lower availability, hoarding and higher prices.