Amidst the government’s concerted efforts to ramp up ethanol production from maize, soaring prices of the cereal in major producing regions have sparked concerns regarding potential disruptions in state procurement initiatives.
According to a senior government official, escalating maize prices in key production areas are likely to impede government procurement activities, raising fears of diminished ethanol supply for the clean fuel market. Notably, central agencies have already inked agreements with more than 40 distilleries to facilitate ethanol production, but the surge in market prices may deter farmers from selling their produce through government channels, which offer a minimum support price (MSP) of ₹2,090 per quintal for the kharif season (2023-24). “We are registering farmers, but procurement efforts will intensify once the rabi maize harvest commences towards the end of April or early May in Bihar, anticipating a decline in prices at that juncture,” remarked the official. Trade sources revealed that the average price of maize in Bihar’s Gulabbagh surged to ₹2,400 per quintal by the end of March, compared to ₹2,300 per quintal a month earlier.
India’s push for maize utilisation as an ethanol feedstock stems from its aim to reduce reliance on sugar and bolster ethanol production. In a bid to safeguard sugar availability, the government directed sugar mills to refrain from utilising cane juice for ethanol production, anticipating a decline in sugar output for the 2023-24 marketing year. However, with maize production projected to decline to 32.4 million tonnes from the previous year’s 38 million tonnes, as per the agriculture ministry’s second advance estimates, concerns loom over meeting ethanol demand. The shortfall in kharif harvest due to erratic rainfall patterns further exacerbated the situation, propelling prices upwards. In response to the government’s procurement plans, farmers have expanded maize cultivation, diverting attention from other crops. Rabi sowing of maize surged to 20.51 lakh hectares by January 12, representing a 4% increase compared to the corresponding period last year across major maize-growing states.
