The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, yesterday approved a hike in the Minimum Support Price (MSP) for several kharif crops, including maize, for the 2025-26 marketing season. The MSP for maize has been raised from Rs 2,225 to Rs 2,400 per 100 kg.
Maize, a key raw material for India’s grain-based ethanol sector, now faces increased input costs due to the MSP hike. However, the price for maize-based ethanol remains unchanged, creating concern among ethanol producers.
The Grain Ethanol Manufacturers Association (GEMA) has highlighted the disconnect between rising maize costs and stagnant ethanol prices. Dr. C K Jain, GEMA President, told ChiniMandi, “While we support fair pricing for farmers, the recent hike in maize MSP raises input costs for the grain-based ethanol sector. Maize prices are increasing significantly, whereas the price of maize-based ethanol has remained at Rs 71.86 per litre. To maintain the viability of ethanol production and ensure continued investment in the biofuel economy, it is imperative that maize-based ethanol prices be increased proportionately. Without such alignment, the sustainability and competitiveness of the sector could be affected.”
The industry points out that government initiatives to boost maize use for ethanol blending have increased maize demand, pushing prices upward. Yet, ethanol procurement prices have not risen accordingly, squeezing margins and threatening production sustainability.
The rising maize prices are also expected to impact starch-based industries that rely heavily on maize as a raw material, affecting their margins and potentially hindering production capacity.
In Maharashtra, where maize is a major component of poultry feed, the Poultry Breeder & Farmer Association (PF&BA) has expressed concerns over the rising cost.
