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Soaring potato prices in Bangladesh

Bangladesh is grappling with a historic surge in potato prices, prompting the government to allow imports from neighboring India to alleviate the impact on citizens, especially those facing poverty. Previously at BDT 65-70 (USD 0.60-0.64) per kg in Dhaka, the soaring prices have political implications as national elections approach in January 2024.

Despite the government's claim of a surplus in March, a supply-demand gap led to the unprecedented decision to import potatoes from India's West Bengal, a region facing a glut. Over 1,000 tonnes have been shipped to Bangladesh within a week, signaling the economic interdependence between the two regions.

A study by the commerce ministry revealed a syndicate of cold-storage owners manipulating prices through a flawed system of slips or cards. These cards lack proper identification, enabling owners to evade regulators and distort prices. The investigation found that 90% of potatoes were owned by cold storage entities or traders, selling at BDT 38-40 (USD 0.34-0.36) per kg, surpassing the government-fixed rate of BDT 26-27 (USD 0.23-0.24) per kg.

To address this, the study proposes releasing preserved produce from cold storage into the open market at government-fixed prices, involving local administration to ensure transparency and prevent malpractices. The Bangladesh Cold Storage Association disputes data on potato production, claiming a significant disparity between the agriculture ministry's reported surplus of 2 million tonnes and their estimate of stored potatoes at 2.5 million tonnes.

Source: www.potatopro.com

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