Speaking to The Financial Express, Kumar stated that HCC conducts futures trading in potato and gur. There has been a mad rush for signing hedge potato contracts for mid-March deliveries, he said.

Kumar stated that the government estimate of 235.62 lakh tonne of potato in 1998-98 as against 192.56 lakh tonne in 1997-98 is likely to be accurate. In Uttar Pradesh alone, potato production is estimated to be 94 lakh tonnes as against 60 lakh tonnes in the previous year.

He said that the soil moisture, climatic conditions and temperature this year are conducive for a bumper potato crop. Though the area coverage under potatoes this year has increased marginally over the previous year, the production will be better as the farmers have gone for more high yielding anddisease-resistant varieties.

Last year, the crop suffered from blight disease. The farmers by and large in UP had sown 3797-variety seeds that could not withstand blight. Besides the inclement weather like high temperature at the time of sowing and continued heavy rains which came subsequently damaged many of the crops in the previous year. The heavy moisture laden winds from the east in the previous year also damaged the crops.

Kumar stated that the commodity exchange market for potato in HCC indicated well in advance that there would be a crisis in potato basing on 1997 production. This is clear from the contracts signed in the period between April 1997 to March 1998. These contracts were signed at rates much higher than the prevailing market rates at the time of contract. Contract signed in April 26, 1997 for delivery in mid-July 1997 was as high as Rs 346.50 per quintal when the open market price was only Rs 156.00 per quintal.

Similarly the contracts signed on June 14, 1997 for delivery inmid-October 1997 was as high as Rs 309.00 per quintal as against the prevailing open market rate of Rs 99.50 per quintal. The contracts signed on February 28, 1998 for delivery in mid-March,1998 was Rs 390.00 per quintal as against the prevailing market rate of Rs 212.50 per quintal.

The contracts signed on March 28, 1998 for delivery in mid-July 1998 was as high as Rs 640.00 per quintal as against the open market prices of Rs 387.50 per quintal.

These rates in the forward market for potato was sufficient to indicate the shortfall in potato production led to possible price rise in future.

Kumar stated that even though the forward market gave sufficient indications for the impending crisis, the government chose to ignore it and as a result the consumers had to bear the burnt, he said.

He stated that farmers this year, particularly in UP has gone for sowing of disease-resistant varieties like 5857, 5758 and 2708. All these varieties are actively traded on the exchange and hence there will be a rush forbooking hedge contracts this year in potato, he said.

According to the estimates of the agriculture ministry, the total potato production in 1998-99 is likely to increase by 22.4 per cent. A total of 12.4 lakh hectare have been so far covered under the crop as against 12 lakh hectare in 1997-98. Availability of seeds and inputs has resulted in coverage of large areas under potato with an expected bumper harvest.

Prospects of potato output in UP, Haryana, Madhya Pradesh, West Bengal and Bihar are reported to be very good. UP alone is likely to produce 90 lakh tonne of potato against previous year's output of 64 lakh tonne. In Haryana, about 2.5 lakh tonne of potato is expected to be produced as compared to 1.5 lakh tonne in the previous year.

Sowing of potato has been completed in almost all major states including UP, West Bengal, Haryana, Punjab and Bihar. No shortage of seeds is reported. Heavy rains in mid-October this year caused substantial damage to the early sown crop in Punjab, yet only 7,000hectare of potato crop has been affected as against the normal area of 50,000 hectare.

About 12 lakh tonne of potato is available in cold storages in West Bengal and UP which will have to come to the market in November and December, this year as the storage is normally emptied for maintenance around this time every year. Thus, all the stored potato will be available for consumption as sowing is already completed and there is hardly any seed requirement. Arrival of newly harvested potato from Punjab, MP and Bihar has also started reaching the market.