Maize Price Surge May Affect Government’s Ethanol Procurement Plans in India
March 31, 2024India’s ambitious plans to boost ethanol production using maize as an alternative to sugar could face a significant hurdle as maize prices escalate in the country’s primary producing regions. This price surge has sparked concerns about the potential reduction in government procurement of the crop, which is crucial for the production of clean fuel.
Senior government officials have expressed worry that the rising market prices might deter state agencies from fulfilling their procurement targets. These agencies have commitments to supply maize to over 40 distilleries for ethanol production, under agreements aimed at promoting cleaner fuel alternatives.
The procurement issue arises as farmers, seeing the higher market prices, might opt to sell their produce to private traders rather than through government channels. Typically, the government procures at a Minimum Support Price (MSP) set for the kharif season (2023-24) at ₹2,090 per quintal. However, with market prices exceeding this rate, the allure of selling at higher prices becomes more appealing to maize cultivators.
