Rising corn prices in India put pressure on bioethanol producers
India’s bioethanol producers have urged the government to raise corn-based ethanol procurement prices by 9% to ₹75 per litre, citing higher maize prices and production costs. Reduced sugar-based ethanol availability is expected to increase grain demand, intensifying competition for corn among biofuel, feed, poultry and starch industries.
Bioethanol producers in India have urged the government to raise the procurement price of corn-based ethanol by around 9% to 75 rupees/liter amid a sharp increase in feedstock prices and production costs. According to S&P Global Energy Platts, the All India Distillers’ Association (AIDA) reported that domestic corn prices had risen to 27 rupees/kg from 17–18 rupees/kg a year earlier. Meanwhile, the effective procurement price for corn-based bioethanol under the latest tender issued by state-run oil marketing companies stands at 68.86 rupees/liter, down 3 rupees from the previous level. The association warned that the current pricing situation threatens production profitability.
The latest tender by India’s state-run oil marketing companies covers purchases of approximately 11 bln liters of bioethanol for the 2026/27 season, running from November to October. The base procurement price for corn-based ethanol remained unchanged at 66.07 rupees/liter, while the additional premium was reduced from 5.79 to 2.79 rupees/liter. Producers argue that raising the price to 75 rupees/liter would help partially offset higher costs for grain, energy, processing and financing. India’s total bioethanol production capacity is estimated at around 20 bln liters per year, including 13 bln liters at grain-based facilities.
Additional pressure on the corn market comes from the Indian government’s decision to ban the use of sugarcane juice and B-heavy molasses for bioethanol production in the new season. According to AIDA estimates, these restrictions could reduce ethanol supplies from sugar-based feedstocks by approximately 2 bln liters. As a result, the share of grain-based ethanol in the country’s bioethanol program could increase from the current 75% to 90% in 2026/27. Corn, off-specification grain and rice from government stocks are expected to remain the main feedstocks.
To support production, the association has proposed increasing government rice supplies through the Food Corporation of India (FCI). The current tender provides for the use of up to 7.2 mln tons of rice, which could produce approximately 3.24 bln liters of bioethanol. However, supplies are limited to the first three quarters of the season, with no rice allocation planned for August–October 2027. Producers are also seeking an increase in the procurement price of rice-based bioethanol, currently set at 60.32 rupees/liter.
Growing demand for corn from the bioethanol industry is intensifying competition for grain with feed manufacturers, poultry producers and the starch industry. Feed industry representatives have already asked the government to allow duty-free imports of 5 mln tons of corn due to high domestic prices and limited supplies. Meanwhile, AIDA opposes corn imports for bioethanol production and is considering proposing restrictions on corn exports to secure domestic requirements. The further development of India’s biofuel program will therefore depend on grain feedstock availability, government pricing policies and the balance of demand among major corn-consuming industries.
To Read more about Maize News continue reading Agriinsite.com
Source : UkrAgroConsult
