The market for potatoes for processing in India in 2024

With only 7% of the total potato production volume, the processing potato market has been a roller coaster. In 2024, it started at INR 8/kg (USD 0.10/kg) in January with Dhada grade/mixed grade (28-60 mm) and exceeded the price to INR 25/kg (USD 0.30/kg) (processing quality) (including flake potato & chip grade) currently. 

French Fry Potato Market: French fry potato (mainly Santana, Frysona) has been constantly hiking in price due to high demand in the early months as many small French fry processors depend on the spot market rather than on contract farming for French fry potato. Surprisingly, in the later months, there is no demand for French fry potato like in the initial months or as predicted. In contrast, Santana is being bought for direct consumption in Mandis at INR > 22/kg (USD 0.27/kg) currently. 

Market Downside in September: In September, there was a slight downside in the market, the reason being that all processors started consuming from cold stores, and early crop plantations started in Punjab & Haryana. This is common and triggers a market downside, forcing traders and farmers to start selling their produce before the new crop arrives. 

Impact of Weather Conditions: However, in a few areas in Punjab & Haryana, due to heavy rainfall in the 2nd & 3rd week, early plantation has been halted and a few planted fields got rotten. This delay in planting and rainfall again shifted the market to a hike in potato prices; this change occurred within < 2 weeks. 

Comparison with 2023: Compared to 2023 data from the graph, in 2024 there was a drastic increase in spot market price where normally prices tend to be lower because of the peak of harvest from Jan – April. 

Reason for Market Hike: The reason for the 2024 market hike, especially for processing potatoes in Punjab & Haryana, is mainly because of an increase in processing facilities (especially flake processors). 

Sourcing and Competition: In UP & Punjab, flake processors source mainly Lady Rosetta from Punjab & Haryana due to the variety’s quality & dry matter. In 2024, due to delayed harvest & predicted yield loss from blight, all players (traders & processors) from MP & Gujarat started sourcing from Punjab, resulting in competition from local traders & processors and market disruption leading to higher spot market rates. 

Future Market Trends: Hopefully, in the coming months, the normal trend will be followed in the market without any error factors contributing to market disturbance.