Maize prices likely to remain strong due to strong industrial demand

26-Jul-2024 06:33 PM

Mumbai. Although the consumption of maize for general food purposes is not increasing much, its demand for industrial use is constantly increasing.

A large quantity of maize is already being used in animal feed and poultry feed as well as starch production, while now maize is also being used heavily for ethanol production in grain-based distilleries.

Due to lack of increase in production in accordance with the rapidly increasing demand and almost stagnant imports from abroad, the trend of ups and downs in the domestic market price of maize is expected to continue in the coming months. 

A heavy customs duty of 50 percent is imposed on the import of maize and only non-GM maize is allowed to be imported in the country.

The stock of this category of maize is mainly in Ukraine, Myanmar and some African countries, while most of the GM maize is produced in top exporting countries like America, Brazil and Argentina.

On the demand of the industry, the government has allowed the import of 5 lakh tonnes of non-GM corn under the tariff rate quota system, which will attract a concessional customs duty of 15 percent, but this is not going to solve the problem.

If the corn requirements for ethanol production are to be met, then two options are available for this - either domestic production should be increased substantially or its duty-free import from abroad should be allowed.

The high and fast domestic market price can provide a good incentive to Indian farmers to increase corn production, but for this, special emphasis should be given on increasing the crop yield rate instead of increasing the area.