India’s maize shortage raises concerns over ethanol production and feed supplies
Drought-related supply constraints and rising ethanol demand are tightening India’s maize availability, intensifying competition among ethanol, poultry, starch and food-processing industries. GEMA criticised reduced maize-based ethanol incentives in the 2026–27 procurement tender, while industry groups urged the government to balance biofuel expansion with food and feed requirements.
Pune: Drought-induced supply constraints and rising demand from ethanol manufacturers are intensifying concerns over maize availability in India, putting pressure on grain-based ethanol producers as well as the poultry and starch industries, The Economic Times reported.
The tightening supply has triggered competition among industrial consumers for the grain, with industry associations urging the government to review its allocation and procurement policies to ensure adequate availability for different sectors.
Maize is an important feedstock for India’s grain-based ethanol industry, which has expanded in response to the government’s ethanol blending programme (EBP). However, the growing diversion of maize towards ethanol production is adding to demand at a time when drought conditions have affected supplies and prices have been rising.
The issue has gained importance following the first ethanol procurement tender issued by oil marketing companies (OMCs) for the 2026-27 ethanol supply year, beginning in November. The tender excludes sugar-based ethanol from the initial procurement round and reduces the incentive for maize-based ethanol by Rs 3 per litre.
The Grain Ethanol Manufacturers Association (GEMA) has raised concerns that the revised procurement structure could favour surplus and damaged foodgrains over maize, potentially limiting the allocation available to maize-based ethanol producers.
According to GEMA, the absence of substantial sugarcane-based ethanol supplies could increase reliance on rice-based feedstocks, particularly surplus foodgrains and damaged foodgrains. The association believes that prioritising cheaper rice-based raw materials while reducing incentives for maize-based ethanol could undermine the economics of maize-based production and weaken demand for maize from farmers.
GEMA president CK Jain said the revised incentive structure could adversely affect the competitiveness of maize-based ethanol manufacturers, particularly if lower-priced rice-based feedstocks receive preference in procurement.
Meanwhile, the National Egg Coordination Committee (NECC) has warned that rising demand from ethanol plants, alongside requirements from starch and food-processing industries, is tightening maize availability for the poultry sector.
In a communication to the government, NECC said poultry feed accounts for around 55-60% of India’s total maize consumption and cautioned that the expanding ethanol blending programme was increasing competition for the grain.
Agricultural expert GK Sood also stressed the need to prioritise maize for food and feed requirements, warning that excessive diversion towards ethanol production could create shortages for poultry manufacturers and increase dependence on imported starch.
The growing concerns highlight the challenge facing policymakers in balancing the government’s ethanol blending ambitions with the raw material requirements of the food, feed and industrial sectors. Ensuring adequate maize supplies and a commercially viable procurement framework for ethanol producers will be crucial as India expands its biofuel programme.
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Source : ChiniMandi
