Risk of food inflation as diversion of maize for ethanol increases

According to a report by The Economic Times, severe concerns have been raised regarding food inflation due to the increased diversion of maize for ethanol production. The demand for maize for ethanol has been increased by oil marketing companies, which is becoming a matter of concern for animal feed costs and overall inflation. Compared to last year, maize prices have doubled and alongside this, expectations of a decline in Kharif production are also being expressed.

Due to the decline in the availability of sugarcane, the competition for maize in ethanol production is being seen as very high. Warnings are being issued by experts that the high prices of maize will have a direct impact on poultry farmers and ultimately the burden will fall on common consumers.

Behind this entire situation, the increasing consumption of maize in the ethanol production sector and the expected decline in its production against it are considered responsible. Due to the situation linked with sugar production and the decreasing availability of sugarcane, ethanol producers have had to turn towards maize, due to which the demand for maize in the market has suddenly increased. According to reports, due to these factors, pressure is being created on the agricultural market and prices of food commodities.

In the coming days, due to this situation, prices of grains and animal feed may go even higher in the market, which has every possibility of having a direct impact on the rural economy as well as the kitchen budgets of common citizens. Experts on related matters and market analysts are continuously keeping an eye on this matter and expressing concern regarding its cascading effects on the economy.