Rising Use of Maize in Ethanol Production Poses Challenge for Poultry and Feed Industries
29-Apr-2025 05:14 PM
Mumbai. The growing use of maize in ethanol production is beginning to raise serious concerns across several key industries, especially poultry feed, animal feed, and the starch manufacturing sector. Industry experts warn that the increasing diversion of maize for biofuel may create a supply crunch for traditional users, driving up costs and impacting exports.
Maize is a crucial input for the poultry sector, which consumes nearly 60% of the country's total maize output. The rest is used in animal feed, starch and food processing, alcoholic beverages, and export markets. However, the recent surge in ethanol production, aligned with India’s green fuel policy goals, is significantly altering demand dynamics.
Sharp Surge in Ethanol-Based Maize Usage
According to industry sources, maize usage for ethanol production rose from just 10 lakh tonnes in 2022–23 to 70 lakh tonnes in 2023–24. It is projected to nearly double to 130 lakh tonnes in the current financial year (2024–25). This surge has tightened supply, causing the price of maize to rise by nearly 20%.
In 2024, the average price of maize climbed to ₹2600 per quintal, peaking at ₹3000 per quintal during peak consumption months.
This price hike has significantly impacted the cost structure of the poultry industry, which is already facing high input costs.
Ripple Effects Across Other Industries
The animal feed and edible oil sectors are also feeling the heat. The vegetable oil industry, which relies on oil meal as a by-product for animal feed and poultry rations, is witnessing a shift. A new by-product of maize-based ethanol production, known as Distillers Dried Grains with Soluble (DDGS), is increasingly being used as a substitute for oil meal in various feed applications.
While DDGS is considered a high-protein, cost-effective feed ingredient, its rise is directly linked to ethanol-driven maize demand. This substitution could alter the traditional market for oil meal and reduce revenue for oilseed processors.
Exports and Human Consumption Hit
The export potential of maize is also being affected. As domestic prices rise due to ethanol demand, Indian maize becomes less competitive in global markets. At the same time, direct human consumption of maize is showing signs of decline, largely due to affordability issues.
Conclusion
With the government pushing aggressively towards its ethanol blending target of 20% by 2025 and 30% by 2030, maize has emerged as a critical input in the energy sector. However, unless domestic maize production is scaled up significantly, the imbalance between fuel and food/feed demand may lead to prolonged stress for allied industries.