India’s animal feed industry is facing a sharp rise in feed prices as weak monsoon rains, drought conditions, lower corn production and growing demand from the ethanol sector tighten domestic supplies creating “havoc”, according to Sumit Sureka, chairman of the Compound Feed Manufacturers Association of India (CLFMA). In an exclusive interview with Expana, Sureka discusses the confluence of factors pushing corn prices to “historic” highs and threatening margins across the poultry value chain.
Animal feed, mainly corn and soybean, accounts for 60%-70% of poultry production costs, making any disruption in grain availability a major concern for producers.
The most immediate pressure on the market is from poor weather and reduced crop output. India’s kharif corn crop, which depends heavily on monsoon rains and accounts for the bulk of annual production, has been hit by the weakest monsoon performance in a decade, cutting rainfall to nearly 13% below average, according to reporting by Reuters.
As a result, India is facing corn production of around 23.5 million tons, representing a shortfall of 1.5 million tons compared with last year’s 25 million tons, Sureka estimated.
The concern is not limited to the monsoon crop. Drought conditions are threatening the upcoming rabi crop (winter crop), adding to fears of a prolonged supply squeeze. Meanwhile, according to current estimates cited by Sureka, the rabi corn crop shortfall is projected at 16.7%, which could deepen the imbalance in coming months.
That tightening supply has already translated into a sharp rise in prices. Corn is now trading at “historical” and “unheard-of” prices, he claims, ranging from INR 31,000/ton (USD 330/ton) to INR 36,000/ton (USD 383/ton) across India.
The scale and speed of the price increase underscore the severity of the market squeeze.
Just a month ago, corn prices were between INR 23,000/ton (USD 245/ton) to INR 27,000/ton (USD 287/ton), Sureka reports. “It has been a sharp increase.”
The rapid jump has intensified pressure on feed manufacturers and livestock producers, especially in poultry.
Beyond weather-related disruptions, “there is more and more pressure from ethanol” adding to the trouble the feed industry is facing, said Sureka. Specifically, the feed industry is contending with growing structural demand from India’s ethanol blending programme, which is drawing more maize into fuel production.
According to the Ministry of Petroleum and Natural Gas, maize’s share in ethanol blending rose from 0% in Ethanol Supply Year (ESY) 2021-22 to around 37% in ESY 2025-26. The government has promoted maize as a grain-based ethanol feedstock as part of its wider crop diversification strategy because it is less water-intensive than some alternatives.
“CLFMA supports government’s requirement for energy,” said Sureka, but he cautions that there needs to be solutions to address the increasing use of maize for ethanol at a time when supplies are already tight.
Although some substitutes for corn in animal rations are available, their use remains limited. Sureka pointed to bajra (pearl millet), jowar (sorghum), broken rice, rice or wheat unfit for human consumption, and DDGS (Dried Distillers Grains with Solubles) as possible alternatives in feed formulations.
“We are trying, we are looking for options,” he said. “But it is impossible to replace [maize entirely] as of now.” With poultry farmers facing sharply higher production costs, Sureka said it will be difficult for the industry to pass those increases on to consumers as other intermediaries, like traders, are the ones who set the price. He argued that the situation is unlikely to ease without government intervention, including measures such as a district-level minimum support price (MSP) mechanism for the poultry sector, similar to the MSP system for maize.
To address the issue, CLFMA has in recent years stepped up efforts to raise awareness of rising raw material costs and their impact across the sector. The association is engaging with the government on possible relief measures and, according to Sureka, temporary steps similar to past export curbs on necessary inputs like corn or soya or import relief windows could help ease pressure on domestic supplies.
Image source: Adobe
Written by Nupur Gill
