Corn prices in India surge 50%, increasing pressure on bioethanol producers
India’s grain-based ethanol producers have urged a review of procurement prices as corn costs rose 50% to Rs 27/kg, while corn ethanol prices fell to Rs 68.86/litre. GEMA warns cheaper rice-based ethanol could reduce corn ethanol orders, threatening plant profitability and farmer demand.
Grain-based bioethanol producers in India have urged the government to revise procurement prices and supply rules for 2026/27 amid a sharp increase in feedstock costs. Over the past year, corn prices have risen by 50%, from Rs 18 to Rs 27/kg, significantly increasing production costs for ethanol plants. Meanwhile, the procurement price for corn-based ethanol has been reduced from Rs 71.86 to Rs 68.86/litre. Industry representatives warn that these conditions threaten production profitability and could negatively affect the prices farmers receive for corn.
According to C.K. Jain, president of the Grain Ethanol Manufacturers’ Association (GEMA), cheaper rice-based ethanol is creating additional competition. Under the latest government tender, the procurement price for ethanol produced from surplus rice supplied by the Food Corporation of India (FCI) has been set at Rs 60.32/litre, while ethanol made from damaged foodgrains is priced at Rs 64/litre. Due to the lower cost of these products, corn-based ethanol plants are concerned about receiving fewer orders from state-owned oil marketing companies.
According to industry estimates, ethanol production from damaged grains and broken rice could increase from around 800 mln litres to more than 7 bln litres in the current supply year. Corn-based ethanol producers fear that increased supplies of cheaper ethanol could force them to lower selling prices despite elevated production costs. Meanwhile, the biofuel industry remains a major consumer of Indian corn: in the 2024/25 ethanol supply year, approximately 13.11 mln tons of corn were used for ethanol production, compared with nearly 5 mln tons of broken and surplus rice.
In October, Bharat Petroleum Corporation Ltd (BPCL), on behalf of state-owned oil marketing companies, launched a tender to purchase 11 bln litres of ethanol for the 2026/27 supply year to support India’s target of blending 20% ethanol with petrol. Eligible feedstocks include corn, broken rice, surplus rice supplied by FCI and C-heavy molasses. However, the government excluded ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses to limit the diversion of sugarcane feedstocks to biofuel production and support sugar output. The deadline for submitting bids has been extended to November 5, 2026.
GEMA representatives are calling for a review of pricing policies and order allocation mechanisms among ethanol producers using different feedstocks. They argue that maintaining the current conditions could weaken the competitiveness of corn-based ethanol and reduce demand for corn from the biofuel industry. The future structure of ethanol production in India will depend on the availability of rice-based feedstocks, procurement policies of oil marketing companies and government priorities regarding food security.
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Source : Ukr Agro Consult
