Government intervention needed to improve maize prices

28-Nov-2025 06:04 PM

New Delhi. The ethanol industry, anticipating strong demand, led farmers to increase maize sowing area to new record levels in the 2025 Kharif season. The limited procurement from the same industry is disappointing producers.

It is noteworthy that the government has significantly increased the selling price of maize-derived ethanol, and oil marketing companies have allocated the largest quota for ethanol supply, but distilleries are purchasing maize at a very slow pace, while the poultry industry is also not showing the expected enthusiasm in purchasing maize.

A bilateral trade agreement between India and the United States is expected to be announced soon. The United States has indicated that the agreement could be signed by the end of November 2025. The poultry and ethanol industries are awaiting the announcement of this agreement.

They are curious to know whether the Indian government has allowed duty-free imports of low-cost GM maize from the United States under this agreement.

The picture will become clear only after a formal announcement. If GM maize imports are not approved, ethanol manufacturers may increase their activity in maize procurement from December.

Given the robust domestic production of maize during the Kharif season, ethanol producers will be reluctant to rush into purchasing it, as supplies to petroleum companies will be delivered gradually over several months.

A large purchase of maize too quickly will increase its price, potentially reducing ethanol producers' margins. The poultry industry is also receiving relief from the weak maize price.

The supply and availability of new maize has increased in all major producing states, while weak demand has led to a sharp decline in prices.

The government should intervene in the market and initiate large-scale maize procurement through its agencies at the minimum support price to prevent farmers from suffering financial losses.