Ethanol and DDGS from Maize: Data and Market Impact

05-May-2025 12:01 PM

Ethanol and DDGS from Maize: Data and Market Impact
★ India’s maize production stood at 320-330 lakh tonnes in 2021-22, against a domestic demand of around 280 lakh tonnes, allowing exports to reach 37 lakh tonnes.
★ Out of the total demand, 200 lakh tonnes came from the animal feed industry—150 lakh tonnes for poultry and 50 lakh tonnes for cattle.
★ 50 lakh tonnes were used for industrial starch, 20 lakh tonnes for direct human consumption, and 10 lakh tonnes for seed and miscellaneous uses.
★ In 2022-23, 8 lakh tonnes of maize were used to produce 3.151 billion litres of ethanol.
★ In 2023-24, this rose sharply to 28.654 billion litres, consuming 75 lakh tonnes of maize.
★ For 2024-25, oil marketing companies have contracted 48.435 billion litres of ethanol from maize, requiring over 127 lakh tonnes.
★ Maize usage for ethanol has been rising year after year.
★ This diversion toward ethanol production has tightened maize availability in the market, pushing up prices sharply.
★ Average maize prices have risen from Rs. 14,000-15,000 per tonne to Rs. 24,000-25,000 per tonne.
★ Maize-based DDGS (Distillers Dried Grains with Solubles) contains 28-30% protein, while rice-based DDGS can contain up to 45%.
★ In the animal feed sector, DDGS has emerged as a cheaper alternative to traditional protein sources like de-oiled cakes (DOC) of soybean, mustard, cottonseed, groundnut, and rice bran.
★ Currently, maize DDGS sells at Rs. 16,000-17,000 per tonne and rice DDGS at Rs. 18,000-19,000, while soybean DOC sells at Rs. 31,000-32,000 per tonne.
★ From 127 lakh tonnes of maize, around 42 lakh tonnes of DDGS will be produced, and an additional 10 lakh tonnes will come from 40 lakh tonnes of rice.
★ In total, over 50 lakh tonnes of DDGS will be generated, contributing to a \~30% fall in soybean DOC prices over the last two years.
★ India allows up to 5 lakh tonnes of maize imports annually at 15% duty; quantities beyond that attract a 50% duty.
★ Between April and January of 2024-25, India imported 9.4 lakh tonnes of maize—5.1 lakh tonnes from Myanmar and 3.9 lakh tonnes from Ukraine.
★ The price surge due to rising demand has encouraged increased maize cultivation over the past two years.
★ According to I-Grain India, with higher production, increased stock, and approval for using alternative grains for ethanol, maize demand could soften, leading to price pressure.
★ Investors are advised to take timely profit bookings.