India's Ethanol Drive Transforms Corn Trade, Turning Exporter into Importer

Surge in ethanol demand pushes up local corn prices, squeezing poultry producers and impacting global markets

India's ambition to boost ethanol production from corn has upended its agricultural landscape, transforming the nation from a major corn exporter into a net importer for the first time in decades. As reported by Reuters, this shift is sending ripples through global supply chains, squeezing domestic poultry producers, and creating new opportunities for corn exporters like Myanmar and Ukraine.

The catalyst for this dramatic shift is India's push to increase the ethanol content in gasoline, aiming for a 20% blend by 2025. This initiative, driven by climate goals and a desire to reduce reliance on sugarcane for fuel, has fueled a surge in demand for corn, the primary feedstock for Indian ethanol distilleries.

As a result, domestic corn prices have skyrocketed, pushing local poultry producers, who rely heavily on corn for feed, into a tight spot. The situation has grown so dire that poultry industry groups are urging the government to slash import duties on corn and lift its long-standing ban on genetically modified (GM) varieties to alleviate the supply crunch.

This surge in demand has turned India's traditionally robust corn export market on its head. Traders estimate that exports in 2024 will plummet to a meager 450,000 tons, a far cry from the usual 2-4 million tons shipped annually. Meanwhile, India is projected to import a record 1 million tons of corn, primarily from Myanmar and Ukraine, both of which are major producers of non-GM varieties.

This shift has forced traditional importers of Indian corn in Southeast Asia to seek alternative suppliers, further impacting global corn trade patterns.