Maize prices surge, procurement for ethanol may be hit
maize for ethanol production, its prices have shot up in the main producing regions, leading to fears of reduced state procurement.
The increased prices can reduce the procurement by government agencies which have already made commitments to distilleries for ethanol production, said a senior government official, adding that the central agencies have already signed memorandum of understanding (MoUs) with over 40 distilleries that produce the clean fuel.
As market price stays elevated, farmers may prefer to sell to private traders over government channels which procures at a minimum support price (MSP) of ₹2,090 per quintal for kharif season (2023-24).
«We are registering farmers but will go strong with procurement when rabi maize starts arriving by end of April or beginning of May in Bihar as we expect prices to come down at that time,» the official added. The average price of maize in Bihar's Gulabbagh crossed ₹2,400 per quintal in March end compared to ₹2,300 per quintal a month ago (February end), according to trade sources.
India is promoting the use of maize as an alternative to sugar to boost ethanol production and ensure sufficient supply of the sweetener in the market. In December, the government had directed sugar mills not to use cane juice to produce ethanol as the country's sugar production is expected to decline in the 2023-24 marketing year that began in October.
The government estimates production of maize to drop to 32.4 mt from the previous year's 38 mt according to the second advance estimates
