Date:19/07/2006 URL: http://www.thehindubusinessline.com/2006/07/19/stories/2006071904341400.htm

Back Potato futures crash on supply pressure

Our Bureau

Long positions offloaded on prospects of good harvest

In bear's grips
Prices have declined to Rs 540 from Rs 750 a quintal.
Trend may continue till rates touch Rs 500-525.
Those holding long positions are unwinding.

Kolkata , July 18

Supply pressure has brought in unwinding of long positions in potato futures over the last two weeks leading to a fall in price from Rs 750 a quintal to Rs 540. Though the futures market is believed to have already witnessed a bulk of the selling, commodity portfolio managers are expecting the bearish trend to continue till prices reach the price band of Rs 500-525 a quintal.

At MCX, which is the leading futures exchange on potatoes (3797 variety), turnover had shot up from Rs 20 crore on Monday last to Rs 55 crore on Tuesday.

Prices fell by Rs 7, Rs 11 and Rs 17 respectively on the August, September and October contracts.

Interestingly, the fall in prices also hint at a possible unsuccessful attempt by some interested parties to create an artificial demand push and manipulate prices.

Kufri futures put off

"The existing stock position as well as prospects of a good harvest in the next season beginning November have forced those going long on potatoes to offload their positions," said Mr Anand Singhania of Prompt Commodities.

Meanwhile, MCX has postponed the launch of future contracts on Kufri Jyoti potato variety (popularly known as Bengal potato) to March 2007. The decision is prompted by the dwindling end-season stocks of Kufri Jyoti in cold storages. The stock position generally lasts between March and October.

Soya oil heading North

With the festive season approaching, soya oil has been experiencing a bullish trend for the last one month, recording a 7 per cent increase in prices ranging between Rs 400 and Rs 430 per 10 kg.