Cheaper crude, dearer ethanol: India’s maize bind
India's aggressive push for E20 ethanol-blended fuel has created a supply-demand crisis, forcing the country to shift from a maize exporter to a net importer. The policy has increased production costs for the poultry and animal-feed industries while squeezing profit margins for sugar mills and distilleries.
Why it matters
The policy highlights the economic trade-offs of energy independence, showing how prioritizing biofuel production can inadvertently inflate food prices and disrupt domestic agricultural supply chains.
India’s policy of reducing dependence on imported crude is fuelling an import dependence on maize — a product that the country exported until recently.
Moreover, E20 fuel, made with 80% petrol and 20% ethanol , remains expensive despite crude oil prices falling in recent months. This is attributed to the low yield of Indian maize, insufficient capacity to absorb the demand for ethanol, and the need to balance domestic sugar consumption with exports.
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