Maize prices expected to remain strong due to heavy use in ethanol production

31-Jul-2024 08:55 PM

Mumbai. An interesting figure has come to light for the 2022-24 season. More than half of the ethanol supplied to the oil marketing companies (OMCs) till June 30, 2024 was made from maize and damaged food grains (broken rice) and the share of ethanol produced from sugarcane was less than 50 percent.

This has happened for the first time. Earlier, the share of ethanol produced from maize and food grains was 27.1 percent in 2022-23, 16.7 percent in 2021-22, 13.6 percent in 2020-21, 9.2 percent in 2019-20, 5 percent in 2018-19 and zero percent in the marketing season of 2017-18.

Two major reasons are believed to change the equation of contribution in the marketing season of 2023-24. Firstly, the government allowed the use of sugarcane equivalent to only 17 lakh tonnes of sugar in ethanol production, which naturally reduced the production of ethanol.

The second reason is that the use of corn in ethanol production increased rapidly and food grain-based distilleries used it in large quantities.

Due to increased use in ethanol production, there is an environment of strong and upward trend in corn prices. Earlier,

60 percent of the total domestic production of corn was used by the poultry feed and animal feed manufacturing industry and about 70-72 lakh tonnes was used by the starch manufacturing industry.

Apart from this, corn was also consumed for direct food purposes and export purposes. But now the ethanol manufacturing industry has made a strong entry in it, due to which the price of corn may remain high and strong in the future as well.