Unrest and Government Change Drive Potato Price to Record Level in Bangladesh

Three months of protests and violence that brought Bangladesh to a grinding halt and overthrew the Awami League government headed by Sheikh Hasina has left the country economically battered. 

The Ready Made Garments sector, which accounts for nearly 85% of the country’s foreign exchange earnings, is estimated to have taken a USD 10 billion hit in these three months alone. Food inflation increased to 14%, resulting in elevated food prices. 

Per reports, potatoes sell for BDT 70-80 (USD 0.59 - 0.67) per kg. An interim government headed by 2006 Nobel Peace Prize winner and Gramin Bank founder Mohammad Yunus is trying to bring the economy back to normalcy. To improve supply by making imports cheaper, the Bangladesh Trade and Tariff Commission (BTTC) recommended the National Board of Revenue (NBR) about a week ago to reduce the tariff on potatoes, among other products, from 33% to 5%. 

Bangladesh, which produced around 11 million tons of potatoes in 2023, produced at least 1.2 million less in 2024. The price, which remained elevated for most of the second half of 2023 and eased briefly during the January-March harvest season, is again at record-high levels. The Department of Agriculture Extension (DAE) said 10.9 million tons of potatoes were produced in 2023-24. 

As 15% of potatoes are wasted from field to market, the production is around 9.3 million tons, nearly meeting domestic demand. However, a devastating monsoon flood has affected nearly five million people in the eastern part of Bangladesh, claiming 71 lives and leaving millions stranded with their homes, farms, and crops wiped out. 

A preliminary assessment by the agriculture ministry says that crops worth BDT 33.5 billion or (USD 282) have been damaged, affecting more than 1.4 million farmers. A local newspaper report says Bangladesh, a potato surplus country that exported around 200,000 tons of potatoes worth USD 4.24 billion to 16 countries in 2021, has become a potato importer. 

Citing NBR data, it says 98,731 tons of potatoes were imported for USD 15.7 million in 2023-24 compared to an export of 12,352 tons worth USD 3.8 million in 2022-23. The import cost of potatoes was around BDT 30 per kg, and these potatoes were sold for BDT 48-55 per kg. 

Bangladesh exported 208,000 tons of potatoes in 2020-21, nearly 100,000 tons in 2021-22, 34,000 tons in 2022-23, and about 12,000 tons in 2023-24. Faced with shortages and rising prices, Bangladesh allowed the import of potatoes on 30 October 2023. 

Experts argue that potato production has grown little over the last few years, and the surplus Bangladesh used to enjoy began to fall as consumption increased in the same period. When the market has a low surplus, traders can manipulate the prices, resulting in price instability.