An Economic Analysis of Potato Prices and Global Food Price Trends

This report provides an economic analysis of potato prices, examining the commodity's role as a staple food and its price fluctuations over a ten-year period. It explores the concepts of demand and supply, including how changes in demand affect prices. The report also discusses the impact of substitute and complementary goods, as well as the elasticity of demand and supply on potato prices. Furthermore, it investigates the correlation between oil prices and food costs, particularly focusing on developing countries and the influence of diesel prices. The analysis incorporates statistical data and references to support the arguments, offering insights into the factors shaping potato market dynamics and global food price trends. The report also analyzes the impact of substitute products like rice and pasta, and complementary products like bread and chips, on the price of potatoes, in addition to the role of consumer price index and health consciousness in the demand for potatoes.

Food price

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Concept of demand and supply analysis......................................................................................6
Impacts of other factors like substitutes and complementary goods on demand and world food
price.............................................................................................................................................7
Concept of elasticity of demand and supply................................................................................7
REFERENCES..............................................................................................................................11

INTRODUCTION
. In this report will be discussion on the important commodity potato which is working as
balanced nutrition’s and fourth important crop in the world. there will be discussion on different
relevant data for last 10 years. Beside this report will have discussion on the linkage between
food prices and oil process in specific manner. On the other hand, there will be variety of factors
which are impacting on world food prices looking at the important concept of demand and
supply, elasticity of demand and supply along with varsity of substitute goods.
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MAIN BODY
Potato as food commodity
. On the other hand, it is important and leading vegetable crop in the United States. It is
important to note that in the area of Idaho and Washington are able to get in produce of there
more than half annual supply totalled up as the 442 million cwt in year 2017. This have been
slightly up from the previous years which have been valued as $3.77 billion. On the other hand,
the average prices of the potato in year 2017 have been $9.10 per cwt, was up $0.02 from 2016.
4

The year 2005 have been declared as the International Year of the Potato regarding
awareness or fundamental importance as staple of food in humanity. This year to get into
promote developments of sustainable potato-based system enhancing the wellbeing producers
and consumer realizing up importance as ‘food of the future’.
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Statistical representation
It is important to note that potatoes prices have taken up looking in massive jump from last
year’s roster prices increased. On the other hand, potatoes prices are making up the changes as
compare to last years with every little progress being made in field due to different weather
conditions.
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7

Changes in the oil prices in last 10 years
On the other hand, there decade beginning in 2020 have to look into various key factor as
determining the price of oil are likely to be similar of the similar decade in better manner. On the
demand side, the growing share of renewables in the energy mix and the increased use of electric
vehicles (EVs) will begin to displace meaningful volumes of fossil fuel demand in power
generation and oil demand in transportation over the next decade.
Oil demand have state in the long distances freight, shipping and aviation along with
petrochemicals which is continuing to group up. But its use in passenger cars peaks in the late
2020s due to fuel efficiency improvements and fuel switching, mainly to electricity.
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Impact of change in oil price on the potato
On the other hand, soaring food and fuel prices have a disproportionate impact on developing
countries and on poor people in developed countries. On the other hand, there have been major
level of absorbing overlooking the higher food prices more easily than spending up 50 to 70 per
cent of their income on food.
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Concept of demand and supply analysis
There is overall global increase in demand of potatoes and prices also are being affected by
increasing rate of demand. If suppliers or producers feel that there is increasing rate of demand
of food commodity and consumers are required to buy this commodity to the great extent then
they increase prices of product. They take advantage of demand and on opposite if there is
decreasing rate of demand and only few consumers buy food commodity then that time for
earning money and selling food commodity that has been produced, producers sell them at lower
prices or decrease prices. So, it can be said that prices are being affected by rate of demand. On
the other hand, the law of supply says that at higher prices, seller supply more of an economic
good. When prices are being increased by producers at any time then it affects the rate of
demand as at the time of higher prices, consumer decrease their demand and at the time of lower
prices they increases their demand, It all depend upon other external factors and pricing strategy
of producers. As like this supply also affect prices. If prices of food commodity or potatoes
increase then producers are willing to manufacture more for earning more profit.
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Suppliers want to sell more quantities when prices are higher because the higher selling
price can justify the higher opportunity of cost of each additional unit sold.
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Impacts of other factors like substitutes and complementary goods on demand and world food
price
Changes in prices of diesel direct have impacts on prices of potatoes. Thos countries who
import food products and this commodity are being majorly affected by prices of potatoes due to
increasing rate of diesel and any fluctuations in diesel. For improving economic condition, diesel
prices are being fluctuated because it is the only thing that is being used by everyone whether
they are from lower class, developed countries or developing.
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