Consumers across India may soon find their breakfast essentials getting costlier as egg prices have seen a dramatic increase of up to 40% over the last year. The primary driver behind this surge is the escalating demand for maize in ethanol production, diverting a crucial ingredient away from the poultry industry and inflating feed costs.
Maize Diversion Fuels Poultry Feed Price Hike
Data from the National Egg Co-ordination Committee (NECC) indicates that ex-farm egg prices now hover around ₹7 per egg, with retail prices reaching ₹8.50 to ₹9. This significant jump comes ahead of the winter season, a period when egg demand traditionally rises, sparking concerns of further price hikes.
Maize is a staple in poultry feed, and its increasing allocation to ethanol distilleries has created a supply crunch for poultry producers. According to a senior NECC official, approximately 37% of India's total maize production, amounting to nearly 17 million tonnes out of 43.4 million tonnes, is now channeled into ethanol manufacturing.
Ethanol Production Surges, Maize Prices Follow
The pressure on maize supply has translated into a sharp increase in its market price. Maize prices have climbed to about ₹26,500 per tonne, a considerable rise from roughly ₹14,000 three years ago. In just the past five months, prices have jumped by nearly 20%, adding substantial burdens to poultry farmers' operational costs.
The poultry industry consumes about 60% of India's maize, making it highly vulnerable to these supply shifts. With ethanol producers also requiring more of the crop, poultry farmers are caught between competing demands for food and fuel.
India's Ethanol Blending Program and Global Market Shift
The rapid expansion of maize-based ethanol production is a direct consequence of India's ethanol-blending program, which mandates blending ethanol with petrol. As the blending target has increased to 20%, demand for both maize and sugarcane for ethanol has intensified. Maize-based ethanol production has grown from 1 million tonnes in 2022 to an estimated 17 million tonnes currently, with projections reaching 25 million tonnes by 2030.
This surge in domestic demand has transformed India's position in the global maize market. Once an exporter to countries like Bangladesh and Vietnam, India is now increasingly reliant on imports. The country reportedly imported a record 1 million tonnes in FY25, sourcing non-GMO maize from Myanmar and Ukraine. Current imports stand around 500,000 tonnes, with expectations of further increases if domestic production cannot keep pace.
While ethanol demand is a major factor, industry executives note that other elements such as heat stress, mortality levels, weather disruptions, and the cost of imported feed ingredients also influence poultry prices. However, the current maize diversion for ethanol remains a significant and growing concern for the stability of egg prices.