{"id":46520,"date":"2025-05-05T09:11:03","date_gmt":"2025-05-05T03:41:03","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=46520"},"modified":"2025-05-17T23:01:12","modified_gmt":"2025-05-17T17:31:12","slug":"fuel-vs-feed","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/fuel-vs-feed\/","title":{"rendered":"Fuel vs Feed: Ethanol Push Disrupts India&#8217;s Maize &#038; Soyabean Market Balance"},"content":{"rendered":"<h2>What\u2019s in Today\u2019s Article?<\/h2>\n<ul>\n<li>Maize Ethanol Controversy Latest News<\/li>\n<li>Imbalance from Ethanol: Impact on Maize Supply and Prices<\/li>\n<li>Collateral Impact: Ethanol Push Hits Soyabean Market<\/li>\n<li>Can Imports Restore Balance in Maize Supply<\/li>\n<li>Maize Ethanol Controversy FAQs<\/li>\n<\/ul>\n<h2>Maize Ethanol Controversy Latest News<\/h2>\n<ul>\n<li>Agriculture provides food, feed, fibre, and fuel. For example, cotton yields lint (fibre), edible oil from seeds (food), and protein-rich cake (feed).\u00a0<\/li>\n<li>However, the growing use of crops like maize for fuel is raising concerns among traditional user industries, as it affects the availability and cost of maize for food and feed purposes.\u00a0<\/li>\n<\/ul>\n<h2>Imbalance from Ethanol: Impact on Maize Supply and Prices<\/h2>\n<ul>\n<li>Until 2021\u201322, India produced 32\u201333 million tonnes (mt) of maize, against a domestic demand of 28 mt.<\/li>\n<li>Surplus allowed for 3.7 mt in exports.<\/li>\n<\/ul>\n<h3>Major demand segments:<\/h3>\n<ul>\n<li>Poultry feed: 15 mt<\/li>\n<li>Cattle feed: 5 mt<\/li>\n<li>Industrial starch: 5 mt<\/li>\n<li>Human consumption: 2 mt<\/li>\n<li>Seed\/other uses: 1 mt<\/li>\n<\/ul>\n<h3>Rising Ethanol Demand<\/h3>\n<ul>\n<li>Maize, rich in starch (68\u201372%), is now used to produce ethanol for fuel blending.<\/li>\n<li>1 tonne of maize = ~380 litres of ethanol.<\/li>\n<li>Ethanol production from maize:\n<ul>\n<li><strong>2022\u201323<\/strong>: 0.8 mt maize \u2192 31.51 crore litres<\/li>\n<li><strong>2023\u201324<\/strong>: 7.5 mt maize \u2192 286.54 crore litres<\/li>\n<li><strong>2024\u201325 (contracted)<\/strong>: Projected 12.7 mt maize \u2192 484.35 crore litres<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Disruption in Supply Chain<\/h3>\n<ul>\n<li>Biofuel demand has disrupted the earlier demand-supply equilibrium.<\/li>\n<li>Livestock feed industry, particularly poultry and cattle feed sectors, is hit hard.<\/li>\n<\/ul>\n<h3>Surge in Prices<\/h3>\n<ul>\n<li>Maize prices have risen from <strong>Rs 14,000\u201315,000<\/strong> to <strong>Rs 24,000\u201325,000 per tonne<\/strong> over four years.<\/li>\n<li>Main reason: diversion of maize towards ethanol under the blending programme.<\/li>\n<\/ul>\n<h2>Collateral Impact: Ethanol Push Hits Soyabean Market<\/h2>\n<ul>\n<li>After ethanol extraction, the leftover mash is dried to form Distiller\u2019s Dried Grains with Solubles (DDGS).\n<ul>\n<li>DDGS is\u00a0a by-product of ethanol production, specifically from the fermentation and distillation of starch-rich grains like corn.\u00a0<\/li>\n<\/ul>\n<\/li>\n<li>DDGS is protein-rich:\n<ul>\n<li><strong>Maize-based DDGS<\/strong>: 28\u201330% protein<\/li>\n<li><strong>Rice-based DDGS<\/strong>: Up to 45% protein<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>DDGS vs Traditional Protein Sources<\/h3>\n<ul>\n<li>Conventional protein feed ingredients include de-oiled cakes (DOC) of soyabean, mustard, cottonseed, groundnut, and rice bran.\n<ul>\n<li>DOC refers to\u00a0the residue left after oil has been extracted from seeds or grains, typically through mechanical pressing or solvent extraction.\u00a0<\/li>\n<li>It&#8217;s a byproduct of the oil extraction process and is used as a source of protein and nutrients in animal feed and as an organic fertilizer.\u00a0<\/li>\n<\/ul>\n<\/li>\n<li>These are <strong>more expensive<\/strong> than DDGS:\n<ul>\n<li>Soyabean DOC: \u20b931,000\u201332,000\/tonne<\/li>\n<li>Maize DDGS: \u20b916,000\u201317,000\/tonne<\/li>\n<li>Rice DDGS: \u20b918,000\u201319,000\/tonne<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Pressure on Soyabean Prices<\/h3>\n<ul>\n<li>Increased DDGS supply offers a <strong>cheaper substitute<\/strong> to soyabean DOC (de-oiled cake).\n<ul>\n<li>DOC refers to\u00a0the residue left after oil has been extracted from seeds or grains, typically through mechanical pressing or solvent extraction.<\/li>\n<\/ul>\n<\/li>\n<li>Livestock feed manufacturers are blending DDGS with soyabean DOC to <strong>cut costs<\/strong>.<\/li>\n<li>Result: <strong>Soyabean DOC prices<\/strong> down by ~30% in two years.<\/li>\n<li><strong>Soyabean grain prices<\/strong> have dropped to \u20b94,300\/quintal, below the <strong>MSP of \u20b94,892<\/strong>.<\/li>\n<\/ul>\n<h3>Winners and Losers<\/h3>\n<ul>\n<li><strong>Maize farmers<\/strong> benefit from rising prices due to ethanol demand (close to or above MSP of \u20b92,225\/quintal).<\/li>\n<li><strong>Soyabean farmers<\/strong>, however, suffer price declines due to falling demand for soy DOC.<\/li>\n<\/ul>\n<h2>Can Imports Restore Balance in Maize Supply<\/h2>\n<ul>\n<li><strong>High Maize Dependency in Livestock Feed<\/strong>\n<ul>\n<li>Maize share in feed:\n<ul>\n<li>Broiler chicken: 55\u201365%<\/li>\n<li>Egg-layer poultry: 50\u201360%<\/li>\n<li>Cattle feed: 15\u201320%<\/li>\n<\/ul>\n<\/li>\n<li>Feed industry is under pressure due to rising maize prices and seeks import liberalisation.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Current Import Policy Constraints<\/strong>\n<ul>\n<li>India allows 0.5 million tonnes (mt) of maize imports annually at 15% duty; anything above that attracts 50% duty.<\/li>\n<li>Genetically Modified (GM) maize imports are prohibited for food and feed use.<\/li>\n<li>In <strong>April\u2013January 2024\u201325<\/strong>, India imported <strong>0.94 mt<\/strong>:\n<ul>\n<li><strong>0.51 mt<\/strong> from Myanmar<\/li>\n<li><strong>0.39 mt<\/strong> from Ukraine<\/li>\n<li>Both non-GM sources<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Industry&#8217;s Proposal: GM Maize for Fuel Use Only<\/strong>\n<ul>\n<li>Industry experts propose importing GM maize solely for ethanol production, not for seed, food, or feed.<\/li>\n<li>This would address the surge in demand from biofuel production without affecting food\/feed safety norms.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Global Trade Implications<\/strong>\n<ul>\n<li>Opening GM maize imports would benefit <strong>top exporters<\/strong>:\n<ul>\n<li><strong>US<\/strong>, <strong>Brazil<\/strong>, and <strong>Argentina<\/strong> (major GM maize growers)<\/li>\n<\/ul>\n<\/li>\n<li>The <strong>US is actively seeking new buyers<\/strong> after China scaled down imports.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Balancing Act: A Domestic Production Push<\/strong>\n<ul>\n<li>Experts suggest increasing <strong>domestic maize production<\/strong> by:\n<ul>\n<li>Boosting <strong>yields<\/strong><\/li>\n<li>Diverting <strong>acreage from rice<\/strong>, which is <strong>water-intensive<\/strong> and already in surplus<\/li>\n<\/ul>\n<\/li>\n<li>A \u201c<strong>win-win<\/strong>\u201d strategy would ensure maize expansion <strong>does not hurt soyabean or cotton farmers<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Maize Ethanol Controversy FAQs<\/h2>\n<p><strong>Q1.<\/strong> Why are maize prices rising in India?<\/p>\n<p><strong>Ans.<\/strong> Due to growing ethanol demand, maize is being diverted from feed and food to fuel, creating supply shortages and price hikes.<\/p>\n<p><strong>Q2.<\/strong> How does ethanol production affect soyabean farmers?<\/p>\n<p><strong>Ans.<\/strong> Cheaper DDGS from ethanol plants replaces soy DOC in feed, reducing soyabean demand and pushing down market prices below MSP.<\/p>\n<p><strong>Q3.<\/strong> What is DDGS and why is it important?<\/p>\n<p><strong>Ans.<\/strong> Distiller\u2019s Dried Grains with Solubles (DDGS) is a protein-rich ethanol by-product, now used as a low-cost livestock feed substitute.<\/p>\n<p><strong>Q4.<\/strong> Can GM maize imports solve the supply issue?<\/p>\n<p><strong>Ans.<\/strong> Only if restricted to ethanol use. It can ease demand pressure without impacting GM restrictions for food and feed applications.<\/p>\n<p><strong>Q5.<\/strong> What is the suggested long-term solution?<\/p>\n<p><strong>Ans.<\/strong> Shift surplus rice acreage to maize and boost yields to meet rising ethanol and feed demand without hurting soy or cotton.<\/p>\n<p>\n<strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/explained-how-ethanol-from-maize-has-ignited-a-fuel-vs-feed-debate-9982838\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s ethanol push is driving maize prices up, hurting feed industries and soy farmers. Can GM maize imports and crop shift restore balance?<\/p>\n","protected":false},"author":5,"featured_media":46521,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-46520","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/46520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=46520"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/46520\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/46521"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=46520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=46520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=46520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}