Cold Storage Profitability Calculator
Estimate the net gain from holding potato, onion or other produce in storage, after rent, weight loss, rot and interest, against selling at harvest.
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Please note: These figures are estimates for planning only. Interest rates, scale of finance, insurance premium rates, subsidies and market charges are set by banks, government notifications and mandi committees and change from season to season. Confirm the current figures with your bank, insurance company, CSC or mandi office before making a decision.
Sell at harvest, or store and wait for a better price? Enter today's price, the price you expect later, the storage rent and the losses. The calculator shows the extra money storage would bring – and the break-even price below which it doesn't pay.
About the Cold Storage Profitability Calculator
Prices of potato, onion and many fruits are lowest at harvest, when everyone sells, and rise over the following months. Cold storage lets you catch the better price – but storage is not free, and the produce shrinks and some of it spoils.
This calculator compares two choices on the same basis:
- Sell now – quantity × today's price.
- Store and sell later – the quantity left after weight loss and rot × the later price, minus rent, handling and the interest you lose by waiting for your money.
The break-even price is the most useful number. If you are not fairly confident that the later price will beat it, storage is a gamble rather than an investment.
How to use the Cold Storage Profitability Calculator
- 1 Enter the quantity and today's price per quintal.
- 2 Enter the price you realistically expect when you take it out, and the months in storage.
- 3 Enter the storage rent, the weight loss and rot you expect, and handling costs.
- 4 Enter your interest rate and press Compare.
The formula we use
Sell now = Quantity × Price now
Quantity left = Quantity × (1 − Weight loss − Rot)
Storage cost = Rent × Quantity × Months + Handling + Sell-now value × Interest ÷ 12 × Months
Gain = Quantity left × Later price − Storage cost − Sell now
Break-even price = (Sell now + Storage cost) ÷ Quantity leftWorked example
100 quintals of potato. Today's price ₹1,200, expected price after 5 months ₹1,800. Rent ₹35 per quintal per month, 3% weight loss, 2% rot, handling ₹30 per quintal, interest 9%.
- Sell now = ₹1,20,000.
- Quantity left = 95 q; income later = 95 × 1,800 = ₹1,71,000.
- Costs = rent ₹17,500 + handling ₹3,000 + interest ₹4,500 = ₹25,000.
- Gain from storing = 1,71,000 − 25,000 − 1,20,000 = ₹26,000.
- Break-even price = 1,45,000 ÷ 95 = ₹1,526 per quintal.
Things to keep in mind
- Prices can fall too. In a bumper year, stored produce sometimes sells for less than the harvest price. Run the numbers with a cautious later price as well.
- Warehouse receipts. Produce in a registered warehouse can be pledged for a loan, which reduces the interest cost of waiting.
- Grade before storing. Store only sound, cured produce; damaged tubers and bulbs rot and spread disease.
Frequently asked questions
How much does cold storage cost for potato?
Rates vary by state and store; they are usually charged per quintal or per bag for the season. Divide the season charge by the months to use this calculator.
How much weight does potato lose in cold storage?
Well-cured potato in a good cold store typically loses a few percent of its weight over a season. Poorly cured or damaged potatoes lose more and rot more.
What is the break-even price?
The later selling price at which storing gives exactly the same money as selling at harvest. Above it you gain; below it you lose.
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