Strong possibility of increase in use of maize in ethanol production

20-Aug-2024 05:11 PM

New Delhi. Some reports suggest that the industries using maize have urged the government to immediately allow duty-free import of 50 lakh tonnes of maize to help meet its shortage.

Earlier, maize was consumed the most in poultry feed and animal feed manufacturing and starch industry, but now its use in ethanol production is increasing rapidly.

It is worth noting that in the current marketing season of 2023-24, the production of ethanol produced from grains was more than the production of ethanol produced from sugarcane, for which mainly maize and broken rice were used as raw material.

According to industry analysts, whether this equation will remain intact in the marketing season of 2024-25 or not, it will depend on how the situation of maize production and supply and availability remains and whether the government allows its duty-free import or not.

A customs duty of 50 per cent is applicable on the import of maize, while a concessional duty of 15 per cent is levied on imports under the tariff rate quota system.

Due to the tremendous demand from ethanol manufacturers, the price of maize has started rising very high and rapidly, which has increased the difficulties of other consumer industries and exporters are also finding it difficult to continue their business.

Not only this, but the grain-based ethanol plants themselves are also feeling very uneasy due to the high price of maize.

When the minimum support price (MSP) of maize was fixed at Rs 2090 per quintal, the purchase price of ethanol was around Rs 72 per liter. Now the government has increased the MSP of maize by 6.5 percent to Rs 2225 per quintal for the 2024-25 season, while the market price is higher than this.