60% of the ethanol offered to OMCs this year is maize-based

Ethanol producers have offered 19.32 billion litres against the oil marketing companies’ (OMCs) tender requirement of 11 billion litres for the 2026-27 supply year, with maize-based ethanol accounting for nearly 60% of the total offers. The quantity offered is close to India’s officially confirmed distillation capacity of 19.5 billion litres, indicating that almost the entire capacity has been offered for ethanol production.

The scale of the offers comes even as the OMCs are estimated to require another 1 billion litres (over and above the 11 billion litres already asked for) to meet the E20 petrol-blending mandate, while private-sector oil companies are expected to require 1.2 billion litres. Other end-use industries, including poultry feed, food processing and starch manufacturing, require an estimated 4 billion litres of ethanol, after adjusting for exports and imports, according to industry estimates.

The economics of the market are driving maize supplierstowards ethanol, with suppliers naturally choosing the highest-paying buyers, an industry expert said.

Of the 19.32 billion litres offered in the tender, 11.45 billion litres is maize-based ethanol. At an estimated conversion rate of around 380 litres of ethanol per tonne of maize, this would require approximately 30 million tonnes of the crop.

This is significant because maize production is estimated by industry experts to be around 15% lower than the previous year when it stood at 55 million tonnes. The large volume of maize-based ethanol offers suggests that the crop remains a profitable input for suppliers despite the reduction in procurement price of maize-based ethanol by ₹3 per litre — from ₹71.86 to ₹68.86 per litre — for the 2026–27 Ethanol Supply Year (ESY), the expert said.

However, the actual quantity of maize used for ethanol will be considerably lower than the 30 million tonnes implied by the offers, depending on the final allocation by OMCs.

According to an industry estimate, the allocation of the 11 billion litre tender requirement is likely to comprise 3.24 billion litres of ethanol made from surplus rice issued by the Food Corporation of India (FCI), 1.6 billion litres made from damaged food grains and 970 million litres made from molasses.

This would leave around 5.19 billion litres to be met through maize-based ethanol. Producing this quantity would require more than 13 million tonnes of maize.

“Even this level of diversion, which is unlikely as 970 million litres cannot come from molasses, will put pressure on traditional users of the crop, particularly the poultry industry, which relies on maize as a major ingredient in animal feed. The industry supplies a significant share of India’s dietary protein through eggs and poultry meat and supports the livelihoods of poultry farmers,” the expert said.

Other sectors that use maize include alcoholic beverages, pharmaceuticals, green chemicals, starch manufacturing and food processing. Higher diversion towards ethanol is likely to increase competition for the crop and put pressure on input costs for these industries, experts said.

The final feedstock-wise allocation by OMCs will determine how much maize is actually diverted to ethanol production.