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.
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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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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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Prices are fluctuated as per the economic condition and for improving economic
condition, prices are being kept high on specially this food commodity because it is being used
by all people.
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It also depends upon the culture as there are some cultures of people that do not make use
of potatoes and instead of potatoes they use raw bananas. So it can be said that substitute in some
cultures of food commodity or food product can also affect prices of products. Due to fluctuation
in prices, it directly affects demand as well as supply. As per the requirement of products,
consumers increases demand.
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Concept of elasticity of demand and supply
Elasticity of demand refers percentage of quantity of demanded of any service or food
commodity and this is divided by the percentages change in the prices of that product. In regards
to price elasticity of demand it can be said that it can be identified by the percentage change in
the quantity demanded of good divided by % change in price. Whereas, prices elasticity of
supply.
The supply and demand factors affecting the farm level price for potatoes has undergone
considerable change in the last two decades. The demand for potatoes is going through various
changes in terms of localization and consumption. The substitute products are affecting their
price. There has been a decreased trend in consumption of potatoes in more affluent societies.
One of the major reason for this that these people are becoming more health conscious and
instead of this they are trying to make use of banana in their food. This means that price for
potato is been decreasing as there is no consumption and low demand for this food product in
United Kingdom. It has been analysed that complementary products like bread, chips and many
other things are increasing price for the potato. This is the way about how substitutes and
complementary products have affected (Bolotova, 2016).
In the past two decades the demand for potato has been decreasing, there are various factors
which are been involved in reducing down demand for potato. Demand for convenience product
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is been increasing and also it is really useful for the buy lifestyles which has been implemented
by so many people. It has also been analysed that there is an increase competition for substitute
products such as rice and pasta. More and more people are been involved in consuming it and
lowering down the price for potato. There is also a strengthen attention for having healthy
aspects of food like low calories and carbohydrate. These factors have affected price of the
selected commodity which is potato. The consumer price index is also affecting the price of
potato. It has also been analysed that as consumers are going health conscious they are been
engaged in taking low calories product, so this has affected and lower down price of potato.
Because of this reason demand for potato will also be lower down. It has been analysed that the
price of substitute and commodity is affecting price of potato like this way. In terms of the
factors affecting potato price, the estimation resulted indicated that potato prices decrease with
increasing volumes and increase with increasing consumption levels. It has been analysed that
because of this reason the demand for potato is been lowering down and also because of this
reason the price of potato is also been decreasing. It can be said that there is a shift in demand
and supply curve because of this reason it has been evaluated that substitute product is been
consumed more by consumers. It has also been evaluated that consumer price index is also
affecting the price of potato. There are so many farmers who are engaged in doing farming for
potato, so it means that this food product is been grown tremendously which is lowering down
price of this food product. By this way price of potato is been affected by price of substitute and
complementary items (ZHANG And et.al., 2017).
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REFERENCES
Books and Journals
Ayesha, B.B., The Media Reach and Impact. Magna Carta, p.325.
Havens, T. and Lotz, A., 2017. Understanding media industries. Oxford University Press.
Lane, D.S., 2020. Social media design for youth political expression: Testing the roles of
identifiability and geo-boundedness. New Media & Society, 22(8), pp.1394-1413.
Lindgren, S., 2017. Digital media and society. Sage.
Siddiqui, S. and Singh, T., 2016. Social media its impact with positive and negative
aspects. International Journal of Computer Applications Technology and
Research, 5(2), pp.71-75.
ZHANG, M. And et.al., 2017. Research progress and prospect of potato market. Chinese Potato
Journal, (2), p.11.
Bolotova, Y.V., 2016. Agricultural supply management and market power: Evidence from the
US dairy and potato industries. Agribusiness, 32(4), pp.563-568.
ONLINE
GM Celebrates its Rebirth as Publicly Traded Company. 2010. Online Available through:
<https://www.seattletimes.com/business/gm-celebrates-its-rebirth-as-publicly-traded-
company/>
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