Maize diversion to ethanol is squeezing poultry feed supplies across India.
Higher feed costs have pushed egg prices sharply higher.
Winter demand could drive prices up further in coming months.
Egg prices across India have surged between 35 and 40% over the past year, reaching approximately ₹7 apiece ex-farm and ₹8.50 to ₹9.00 in retail markets. The steep hike stems from the government's 20 per cent ethanol blending mandate, which has accelerated the diversion of maize and sugarcane to biofuel production.
This policy shift has tightened domestic feedstock availability, according to data from the National Egg Co-ordination Committee (NECC). Poultry industry executives expect prices to remain firm and climb further as winter demand accelerates.
"Roughly 37% of the total maize production is now going to ethanol distilleries. In the past one year, egg prices have gone up by nearly 40% and are likely to rise further," a senior NECC official told ET.
Rising Feed Costs
The widespread feedstock shortage has driven maize prices to approximately ₹26,500 per tonne, up from ₹14,000 three years ago. This includes a 20% jump over the last five months alone. The domestic poultry sector traditionally consumes 60% of India's maize output, placing farmers in direct competition with distilleries.
"Maize and soybean prices have a direct bearing on poultry feed costs, and any sustained increase in feed prices eventually reflects in the cost of producing eggs and chicken," a senior industry executive told ET.
The executive also highlighted additional market pressures. "That said, ethanol demand and diversion is not the sole driver of poultry prices. Factors such as heat stress, mortality levels, weather disruptions and the availability and cost of imported feed ingredients can also significantly influence production costs and market prices," the executive added.
Global Trade Shifts
Parliamentary data shows India produces 43.4 million tonnes of maize annually, with nearly 17 million tonnes or 37% now diverted to ethanol production. The volume of grain used for biofuel has expanded rapidly from 1 million tonnes in 2022 to more than 6 million tonnes in 2024 and around 17 million tonnes at present. Market projections indicate this figure will reach 25 million tonnes by 2030.
This massive internal consumption has transformed the nation's agricultural trade balance. India previously exported surplus maize to regional buyers such as Bangladesh and Vietnam. The rapid domestic deficit has now forced a reversal, industry executives said.
Corn imports touched a historic peak of 1 million tonnes in the 2025 financial year. The country bypassed standard trade quotas to acquire non-GMO grain from Ukraine and Myanmar. The nation is currently importing 0.5 million tonnes to bridge the widening supply gap, which the industry feels will go up if domestic production doesn't increase at a faster pace.
