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What went wrongA potato wholesaler in Ishwardi, in an Alokito Bangladesh report

Potato bought at 26-27 taka is selling at 12-13

Eight truckloads of potato bought at 26-27 taka a kg now fetch 13 wholesale, 12 for graded stock out of store and 9-10 ungraded.

This arotdar in Ishwardi, Pabna, bought eight truckloads of potato at 26-27 taka per kg and put them into cold storage. By selling time wholesale was 13 taka per kg, graded stock out of store 12, and ungraded stock 9-10 - less than half of what he had put in. With the farm production cost at 18-20 taka, buying at 26-27 meant paying a speculative premium before storage rent even started. At one local cold store, 35,000 of 65,000 sacks were still unclaimed, because paying the rent to take them out cost more than the potatoes were worth. The cold store owner said he had never seen a season like it.

Lessons

  1. 1.When the farm cost is 18-20 taka, buying at 26-27 means the speculative premium is paid before storage rent even begins
  2. 2.Decide the exit price before anything goes into a cold store, or the rent alone will strand the stock inside

Published with the person's permission, without revealing who they are.

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