CAN COLD STORAGE REDUCE SEASONAL VARIATION IN PRICES OF AGRICULTURAL COMMODITIES? A CASE OF POTATO IN BANGLADESH

Reduce Seasonal Variation in Prices

Abstract

Cold storage has a significant role to maintain supply of potato throughout the year in a country and hence it can influence to reduce the seasonal price variations because in agriculture supply mainly regulates the price of commodities. This study was undertaken to investigate whether the cold storage can reduce the seasonal variation in prices of potato in Bangladesh. National data on monthly wholesale prices of potatoes (potato local, potato Holland white and red) were collected during the period from 1972 to 2018 from Department of Agricultural Marketing. Ratio to the moving average method was applied to measure the seasonal price indices between the two periods (before establishing sufficient capacity of cold storage and after establishing sufficient capacity of cold storage for storing potato in Bangladesh) for assessing whether the cold storage can reduce seasonal variation in prices of potato.  From the study it was revealed that seasonal price variation of different varieties of potatoes became lower after establishing sufficient cold storage capacity (more than 30 per cent of total potato production from 1988 to 2018) in the country, i.e., there is an impact of cold storage in reducing the seasonal price variation of potato. Because price variations for individual months, coefficient of variation and range, all of them are lower after establishing sufficient capacity of cold storage.  So, cold storages can reduce the seasonal variation in prices of potato. Government should facilitate more for establishing cold storage; these facilities can improve the seasonal price fluctuations of other vegetables also.