India’s recent push to increase corn-based ethanol production has transformed the country from Asia’s top corn exporter into a net importer for the first time in decades. This shift is causing significant challenges for local poultry producers and disrupting global supply chains.
In January, India raised the procurement price for corn-derived ethanol to encourage a transition away from sugarcane-based ethanol for gasoline blending. This government initiative aims to reduce carbon emissions while ensuring a stable supply of affordable sugar in the world’s largest market for the sweetener. As a result, India is likely to become a permanent net importer of corn.
The increased demand for imports is expected to support global corn prices, which are currently near four-year lows. Local poultry producers are feeling the pinch as domestic corn prices surge above global benchmarks, prompting calls for the government to eliminate import duties and lift the ban on genetically modified (GM) corn, which limits their purchasing options.
Historically, India has exported between 2 million and 4 million metric tons of corn annually. However, projections for 2024 indicate exports will plummet to around 450,000 tons, while imports could reach a record 1 million tons, primarily from Myanmar and Ukraine, which produce non-GM corn.
Traditionally, India’s corn production, estimated at around 36 million tons, has been absorbed mainly by the poultry and starch industries. However, the recent shift toward ethanol production has led to increased competition for corn supplies. Ethanol distilleries are projected to require between 6 million and 7 million tons of corn annually, a demand that can only be met through imports, according to Nitin Gupta, senior vice president of Olam Agri India.
This change is forcing traditional export markets like Vietnam, Bangladesh, Nepal, and Malaysia, which previously sourced corn from India, to seek supplies from South America and the United States. A trader from Ho Chi Minh City noted that Vietnam has recently reduced its corn imports from India due to rising prices.