Ethanol tender curbs on cane routes may lift maize demand and push up egg, chicken prices

There is already resentment in the country over E20 petrol. A new question is now being asked: could the rising use of grain for fuel create a fresh crisis by making the food plate costlier? The government's new rules for buying ethanol are being seen as an attempt to balance energy needs against grain inflation. Here is what the decision could mean for your pocket and your plate.

Oil companies have invited tenders to buy about 1,100 crore litres of ethanol for the 2026-27 supply year. However, the new tender does not include ethanol made from sugarcane juice, syrup and B-heavy molasses. The main aim of the decision is to keep sugar from being diverted to ethanol production and to keep grain inflation in check.

With some sugarcane-based ethanol options barred, the oil companies' purchase costs are feared to rise. As a result, to meet their ethanol requirement the companies may have to depend more on other options such as maize and C-heavy molasses.

According to the figures, the purchase price of ethanol made from maize is Rs 68.86 per litre, while ethanol made from B-heavy molasses costs Rs 60.73 per litre. Maize ethanol is thus about 13.4 per cent costlier than B-heavy molasses ethanol. This could raise the oil companies' costs.

The impact will not stop at the oil companies. If more maize is used to make ethanol, the poultry industry's costs could also be affected, because maize is a key part of chicken feed. The poultry industry uses about 55 to 60 per cent of the maize produced in the country.

If more maize is taken for ethanol, the cost of animal feed could rise. This is likely to affect egg and chicken prices. How much prices rise, however, will depend on how much maize is available and on market conditions.