The Centre’s restrictions on ethanol production from surplus FCI rice and damaged foodgrains, alongside curbs on sugarcane-based feedstocks, are expected to increase demand for maize in the 2026-27 supply year.
Industry estimates suggest maize demand for ethanol could rise to 16 million tonnes from around 13 million tonnes in the current supply year, intensifying competition with poultry, dairy and starch industries.
Under revised tender conditions, ethanol production from surplus FCI rice has been capped at 3.24 billion litres for the first three quarters, while damaged foodgrain-based ethanol is limited to 1.6 billion litres annually.
The restrictions follow the government’s decision to stop sugar diversion for ethanol production in 2026-27, leaving maize to meet a larger share of demand.
Maize prices have already climbed to ₹30-31 per kg in key mandis, above the minimum support price of ₹24.1 per kg.
Overall maize demand could rise to 55.7 million tonnes in 2027, compared with an estimated 49-50 million tonnes in 2026. Concerns over El Niño and a possible decline in maize availability could further tighten supplies.
Oil marketing companies may also float an additional tender for around one billion litres of ethanol, potentially increasing pressure on feedstock availability and prices.
