Impact of DDGS: Relief for Feed Industry, Setback for Soybean

05-May-2025 12:10 PM

Impact of DDGS: Relief for Feed Industry, Setback for Soybean
★ With the rapid rise in ethanol production from maize in India, the use of DDGS in the animal feed industry is growing significantly.
★ This has provided feed manufacturers with a cheaper and high-protein alternative, but it has had a direct negative impact on the soybean industry.
★ In 2024-25, an estimated 4.8435 billion litres of ethanol will be produced from maize, requiring around 127 lakh tonnes of maize.
★ From this, approximately 42 lakh tonnes of DDGS will be generated from maize and an additional 10 lakh tonnes from rice— a total of over 50 lakh tonnes of DDGS, which is replacing traditional DOC (De-Oiled Cake) in feed formulations.
DDGS Price Comparison:
Maize DDGS (28-30% protein): Rs. 16,000-17,000/tonne
Rice DDGS (up to 45% protein): Rs. 18,000-19,000/tonne
Soybean DOC: Rs. 31,000-32,000/tonne
★ Due to the increased availability of DDGS, demand and prices of soybean DOC have dropped significantly—by nearly 30% in the past two years.
★ Soybean is currently trading at Rs. 4,300 per quintal, well below the government's MSP of Rs. 4,892.
★ While the increasing use of maize for ethanol has benefitted maize farmers with higher prices, soybean producers are suffering losses.
★ DDGS has brought relief to the feed industry but has posed serious challenges for soybean growers and processors. Policymakers must take note of this shifting balance.
★ Unless the government intervenes soon, the growing crisis could impact India's edible oil and oilseed sector, leading to deeper long-term issues.