New Delhi: Potato prices globally have not hardened as much as the rates of other food items like cereals as the root crop is not greatly exposed to the “ill-effects” of speculative trading, a UN body has said.
“Unlike major cereals like wheat, maize and rice, potato is not a globally traded commodity. Only a fraction of total production enters foreign trade and its prices are determined by local demand and supply conditions, not the vagaries of international markets,” the Food and Agriculture Organisation (FAO) said in its report on potato.
The observation by FAO is seen as a somewhat vindication of Indian government’s decision last month to ban futures trading in potato.
While noting that potato is an “antidote” to the high food price inflation, Rome-based FAO said that “being absent in the major commodity exchanges, there is no risk of potato bearing the ill-effects of speculative activity, which cannot be said of cereals.”
The observations follow a recent survey by FAO of the “depth and breadth of food price inflation in over 70 of the most vulnerable countries in the world.”
“Cereal price inflation was overwhelmingly higher and far more widespread than for potato and other root crops,” FAO found.
The observations about potato prices not seeing a high level of inflation like those commodities that are extensively traded in the futures markets follows Indian government’s decision to ban forward trading in this commodity last month on concerns related to its surging prices.