Production of ethanol through sugarcane has caused sugar crisis along with increasing pressure on prices. Increase in the usage of rice has created worries regarding its availability and prices as well. As a result, buying of ethanol obtained from sugarcane which is the major source was stopped along with the production of ethanol through rice.
Corn will become the major crop for the ethanol industry. In this scenario, measures aimed at easing pressure on one agricultural product might influence others. Consumers seem perplexed by all of this.
Besides sugar and rice, prices of corn are also becoming high along with egg, chicken, milk and many processed foods.
As a matter of fact, oil companies have fixed a goal to buy 1,100 crore liters of ethanol in 2026-27. But it needs some changes in raw material choices.
To maintain domestic sugar availability, the purchase of ethanol from sugarcane juice, sugar syrup, sugar, and B-heavy molasses has been suspended from November 1, 2026, to October 31, 2027. Ethanol production is permitted only from C-heavy molasses, the residue after sugar extraction. A rice limit has also been set.
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A maximum of 3.24 billion liters of ethanol will be produced from rice other than FCI rice. This requires 7.2 million tons of rice. Rice-based ethanol will not account for more than 30 percent of a single distillery’s total production. A maximum of 1.6 billion liters of ethanol can also be produced from broken rice. Thus, a total of 4.84 billion liters of ethanol will be available from both sources. For the remainder, reliance on maize and other alternative grains will increase.
According to the Ministry of Agriculture, maize consumption for ethanol is expected to increase from 13 million tons to 16 million tons in 2026-27. Approximately 3 million tons of additional maize will be needed. Due to a weak monsoon, it is doubtful that this much maize will be available.
Maize prices in the markets have reached 29 to 30 rupees per kilogram, while its minimum support price is 2,410 rupees per quintal.
The rising maize prices will primarily impact the poultry industry. Maize is a major component of chicken feed. This increase in its cost could lead to higher prices for eggs and chicken.
The rise in the price of balanced animal feed used in dairy and animal husbandry will also increase the cost of milk production. Additionally, industries producing starch from maize will be affected. The impact of this cost could extend to the food processing, paper, textile, and pharmaceutical industries.
