Egg prices in India under pressure as more corns go to ethanol production

The increase in corn demand is linked partly to the government’s ethanol blending program, under which oil companies mix ethanol with petrol. With the blending level reaching 20%, more sugarcane and corn are being used to produce ethanol, affecting their availability for sugar production and animal feed.

Corn prices have risen sharply amid tighter supplies. They have increased to nearly USD 303/ton from around USD 160/ton three years ago and have risen almost 20% in the past five months.

“Corn is the biggest cost for poultry farmers, accounting for 65-70% of total poultry production costs. Any sustained rise in corn prices is particularly painful for the industry,” the NECC official said.

Another senior industry executive said corn and soybean prices directly affect poultry feed costs, with higher feed prices eventually increasing the cost of producing eggs and chicken.

However, the executive said ethanol demand was not the only factor affecting poultry prices. Heat stress, bird mortality, weather disruptions and the availability and cost of imported feed ingredients can also influence production costs and market prices.

Corn-based ethanol production has expanded rapidly, rising from about 1 million tons in 2022 to more than 6 million tons in 2024 and around 17 million tons currently. Experts expect production to reach 25 million tons by 2030.

The poultry industry uses about 60% of India’s corn, putting it in direct competition with ethanol producers for the crop.

The rising demand has also changed India’s position in the global corn market. India was earlier an exporter to countries such as Bangladesh and Vietnam, but stronger domestic demand from poultry producers and greater use of corn for ethanol have reduced the surplus available for exports.

Industry executives said this has contributed to India turning to imports. Corn imports reached a record 1 million tons in financial year 2025, with India bypassing its usual trade quotas to source non-GM corn from Myanmar and Ukraine.

India is currently importing around 500,000 tons of corn, and industry players expect imports to increase if domestic production does not grow quickly enough to meet rising demand.