Livestock Feed Producers Face Intensifying Competition for Maize Supply as Ethanol Demand Soars.

Divya Kumar Gulati, chairman of CLFMA of India, recently highlighted concerns over potential restrictions on using sugarcane for ethanol production, which may increase competition for maize supplies among livestock feed manufacturers. This comes amid reports of reduced maize acreage and anticipated yield declines due to adverse weather conditions, specifically El Niño effects. The Agriculture Ministry’s latest data indicates a 2.64% decrease in maize planting compared to the previous year, posing serious challenges for an industry heavily reliant on maize as a key feed ingredient.

This situation has significant implications for the common citizen and the market. Given that maize constitutes 50-60% of poultry feed, any rise in maize prices—already at Rs 2,700-2,800 per quintal—will directly influence the prices of essential goods such as eggs and chicken meat. Consumers may face higher costs due to inflated feed prices, which typically account for 60-70% of poultry production costs. The livestock industry, particularly poultry, is expected to experience pressure as supply chains tighten due to intensified competition for this critical resource.

Looking ahead, the government and agricultural policymakers face the challenge of balancing the needs of both the ethanol sector and livestock feed producers. Continuous advocacy from CLFMA emphasizes the necessity for protective measures to ensure adequate maize supplies. As the feed sector grapples with these challenges, it will be crucial to monitor crop outputs and explore alternative feedstock options to mitigate long-term impacts on both livestock farmers and consumers. Policymakers may need to strategically reassess allocations to maintain a stable supply chain and avert exacerbating food inflation.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)