127 lakh tonnes of maize needed to fulfill ethanol contract

06-May-2025 08:29 PM

Pune. Oil marketing companies have contracted to purchase 1184.35 crore liters of ethanol produced from maize from millers and distilleries for supply during the current marketing season (November-October) of 2024-25. To meet this ethanol target, more than 127 lakh tonnes of maize will be required.

This substantial diversion of maize for ethanol production could lead to a supply shortage for other major maize-consuming industries.

The poultry industry is the largest consumer of maize in India, using nearly 60 percent of the total production for poultry and animal feed.

Additionally, 65-70 lakh tonnes of maize is consumed annually in starch production, while 10–15 percent of the crop is used directly for human consumption.

If nearly one-third of the total maize output is diverted to ethanol production, the availability of maize for these other sectors could be severely affected.

This could not only push maize prices higher but also increase reliance on imports. However, maize imports are burdened with heavy customs duties.

According to the chairman of the Compound Livestock Feed Manufacturers Association of India, the growing use of maize for biofuel ethanol is upsetting the demand-supply balance.

Ethanol demand is increasing rapidly, causing shortages and price inflation. Over the past four years, the average all-India maize price has risen from Rs 14,000–15,000 per tonne to Rs 24,000–25,000 per tonne, significantly increasing production costs.

This price hike is being largely attributed to the ethanol industry, and there is growing demand for government intervention.

Meanwhile, the use of oil meal is being impacted by the growing supply of Distillers Dried Grains with Solubles (DDGS), a byproduct of ethanol production. Maize DDGS contains 28–30% protein, compared to rice DDGS, which can have up to 45% protein.