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Informist, Monday, Nov. 3, 2025

 

By J. Navya Sruthi

 

MUMBAI – Despite India's maize output seen at record high for the second consecutive kharif season and domestic prices below the minimum support price, experts and traders do not expect a significant shift from maize to other crops in the rabi or next kharif season. This is because returns on maize continue to be more favourable than other crops for farmers and also because of lower input cost.

 

The absence of a lucrative alternative that offers both high returns and a lower risk of crop failure leaves maize as the only option for farmers, experts said. The low prices also provide India a chance to re-enter the global market, they said.

 

Maize prices are likely to remain subdued in 2025–26 (Oct-Sept) because of higher production and low demand, particularly from the ethanol industry, experts said. G.K. Sood, an agriculture economist and chairman of MEIR Commodities, expects maize prices to remain below the minimum support price at least till Jun–Jul as there is a "glut" in the market.

 

Maize prices are currently in the range of INR 1,600-INR 1,900 per 100 kilograms. Maize with an acceptable moisture content of 14% is being sold around INR 1,900 per 100 kg, while grain with 25-32% moisture is priced INR 1,600-INR 1,700 per 100 kg. These prices are far below the government's minimum support price of INR 2,400 per 100 kg for the kharif marketing year 2025-26.

 

Prices are low as early arrivals of the maize crop have high moisture content, Sood said. "But regardless of that, it is not such an attractive year (in terms of price) for maize farmers as the previous two years have been." When the peak marketing season is over in Jun-Jul and dry crop starts arriving in the market, prices will likely rise to around INR 2,100 per 100 kg, he said.

 

Traditionally, it was only Maharashtra, Bihar, Karnataka, and Andhra Pradesh that were known as maize producing states, but now, maize is also being grown in Madhya Pradesh, Rajasthan, and Uttar Pradesh. This has led to a sharp increase in production, which is weighing on prices, said Shiva Kumar, a local maize trader from Karnataka's Davanagere. After 2023, many farmers shifted from oilseeds and pulses to maize.

 

In January 2024, prices of maize had risen to an all-time high of INR 2,900 per 100 kg as output fell because of erratic rainfall and rise in demand from the ethanol sector. These attractive returns led farmers to shift on a largescale basis to maize, increasing the area under maize in the crop year 2024–25 (Jul-Jun) and kharif 2025.

 

In the crop year 2024-25, maize acreage grew nearly 7% to 12.02 million hectares, which included 8.4 million hectares during kharif, 2.72 million hectares in rabi, and 864,000 hectares in summer. As a result, production of maize rose to a record high of 42.28 million tonnes after a slight fall in the previous year.

 

This year, maize acreage as of Oct. 3 was 9.5 million hectares, up nearly 13% from the corresponding period of the previous year. Experts see maize output during kharif season at 27 million tonnes to 29 million tonnes, up from 25 million tonnes in the same period of the previous year. They see total maize production in 2025-26 remain high around 47 million tonnes.

 

LOW INPUT COSTS

The minimum support price of maize is generally irrelevant, Sood said. "Of all the crops for which MSP is declared, only one-fourth is bought (by the government)... I see prices at about (INR) 2,100 (per 100 kilograms) when the peak marketing is over and good quality comes. So farmers will happily grow," he said.

 

Arpit Jain, senior vice president, energy procurement-grains at IB Group, said the risk of crop loss is very low for maize and farmers will continue to cultivate it.

 

G. Chandrashekhar, policy commentator and commodity markets expert, said current prices have not met the expectations of farmers, but they will also not suffer a loss as input costs for growing maize are lower.

 

The government's minimum support price for the current kharif year is nearly 60% more than the input cost. Input costs include those incurred on account of labour, machinery, rent paid for leased land, seeds, fertilisers, manures, irrigation, depreciation on implements, and imputed value of family labour. According to the government, cost incurred by a maize farmer is INR 1,508 per 100 kg, the lowest compared to other 13 kharif crops.

 

Maize devoid of moisture is currently priced at INR 1,850 per 100 kg. Prices could fall to INR 1,750 per 100 kg by December, but it would still be a better price, IB Group's Jain said. Maize farmers may not incur losses; it is just that realisation is less this year. Farmers are unlikely to shift to other crops as maize gets better realisation than others, he said.

 

ETHANOL: RICE VS MAIZE

In December 2023, a government decree to cap sugarcane diversion for ethanol triggered a chain reaction and led to a surge in demand for maize from the ethanol sector. In the following month, the government raised the procurement price of ethanol made from maize to INR 71.86 per litre, from INR 66.16 per litre earlier, encouraging a move away from sugarcane-based ethanol due to dwindling sugarcane surplus as output of the crop was seen to be lower.

 

However, in August 2024, the government allowed sugar mills to divert sucrose from all sugarcane-based feedstocks for production of the biofuel in the ethanol year 2024-25 (Nov-Oct). It later also allowed ethanol distilleries to participate in Food Corp. of India's weekly rice auctions.

 

In ethanol year 2025-26, grain-based ethanol continues to dominate India's biofuel-blending programme, accounting for over two-third of total supply orders. Of the total ethanol allocated, 4.79 billion litres, or 45.7% of the total, will come from maize, followed by 2.33 billion litres, or 22.3%, from rice bought from Food Corp.

 

Experts said demand for maize from the ethanol sector is seen declining marginally in 2025-26. With the government allowing rice from Food Corp. for ethanol production, demand for maize is likely to fall by 1.0-2.5 million tonnes in the season, Jain said.

 

Diversion of rice for production of ethanol is also weighing on maize prices, Chandrashekhar said. The government missed the linkages between sugarcane, maize, and soybean when it banned diversion of sugarcane for ethanol, he said. The government's policy was "fickle, unsteady, temporary, and unpredictable", and farmers shifted to maize based on such policies, he added.

 

EXPORTS REVIVAL

India was a net exporter of maize before FY23. The country's exports plunged only after output fell in kharif 2023. The lower output also compelled the government to allow duty-free imports in 2024-25 (Apr-Mar) to meet the domestic demand.

 

Despite an import duty of 60% duty, India's maize imports in FY25 rose to almost 1 million tonnes as the government allowed imports of almost 500,000 tonnes under the tariff-rate quota in January 2024. This was mainly because of low production of the grain in kharif 2023 and rise in demand from the ethanol sector. This made India a net importer of maize in FY25.

 

India exported 558,136 tonnes of maize in FY25, lower than 1.44 million tonnes in FY24 and down from 3.70 million tonnes in FY22. On the other hand, maize imports in FY25 were 970,070 tonnes, just 137,094 tonnes in FY24, and as low as 23,726 tonnes in FY22.

 

Experts see the glut and falling domestic prices as an opportunity for India to re-enter the global market.

 

"So this year (FY26), depending on parity, as you go along, there might be export (of maize)," Sood said. If the market conditions are favourable, then about 1 million tonnes of maize exports are likely in FY26, he added.

 

Although the moisture content in the grain is high currently, the moisture is expected to reduce as it stops raining, experts said. With acceptable moisture content and lower prices in the domestic market, India can start exporting maize.

 

Currently, the price of maize exported by India in the global market is at par with the US, which is the largest maize producer, Sood said. Prices are likely to remain at an average of INR 2,100 per 100 kg in the current year, which will support the country's exports, he added.

 

Jain said India's maize is priced $220 per tonne in the global market and that from the US is priced $200 per tonne. As the US exports genetically modified maize, it is unlikely to compete with India. However, prices of non-genetically modified maize from Ukraine and Myanmar are also around the same level, which allows India to export the commodity, he added.

 

In other words, it is a chance for India to become a net exporter after being a net importer for a brief period.  End

 

US$1 = INR 88.78

 

Edited by Ashish Shirke

 

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