Ethanol distilleries sourcing maize as feedstock have been tasked with supplying 431 crore liters of ethanol, requiring an estimated 11.3 million tonnes (MT) of maize. This raises concerns about the availability of such a large quantity. However, industry sources indicate that this year, 8 MT of maize will be sufficient to meet the demand for 306 crore liters, suggesting that the transition to next season should proceed smoothly.
As of September 30, ethanol produced from maize accounted for 231.49 crore liters, or 76% of the total target for the ethanol supply year (ESY) 2023-24, which runs from November to October.
Looking ahead, during the first two quarters (November-April) of the next ESY, distilleries will require fewer than 5 MT of maize to supply 188 crore liters of ethanol as agreed with oil marketing companies (OMCs). With kharif maize production in 2023-24 reaching 22.25 MT from 8.33 MT, the increased acreage this season may further boost the availability of the grain.
Higher Acreage Expected
According to data from the Agriculture Ministry, maize acreage for the kharif season has risen by 4.5% to 8.85 million hectares as of September 27, compared to 8.47 million hectares last year.
However, an agriculture scientist has raised concerns that this acreage data may not fully reflect reality. Due to favorable rainfall, some areas may have shifted from maize to paddy cultivation. As the acreage data is updated several times during the year, it is premature to make definitive projections on production. Notably, Karnataka, a major producer of kharif maize, reported a reduction in acreage by about 50,000 hectares.
Maize as Preferred Feedstock for Ethanol Production
Indian distilleries produce approximately 380-390 liters of ethanol per tonne of maize, compared to 450-460 liters per tonne of rice. However, given the limited availability of broken rice and its less profitable price, most distilleries prefer maize, increasing competition for the grain from other sectors such as industrial users and poultry/cattle feed manufacturers.
Currently, maize is priced at around INR 2,101 per quintal, which is below its minimum support price (MSP) of INR 2,225 in agricultural markets (mandis). However, in states like Karnataka, Uttar Pradesh, Punjab, Haryana, and Gujarat, mandi prices exceed the MSP. Traders attribute the lower prices, especially in Madhya Pradesh, to higher moisture content in the grain and expectations of a larger crop in the state.
Source: The Business Line
