Surge in India Corn Consumption Shifts Regional Market Dynamics

  |   Trade Spotlight



India is expected to reach record corn consumption of 37.4 million tons for marketing year (MY) 2023/24 (Nov-Oct). This increase is driven by the government’s ethanol policy and the growth of the poultry sector, which have significantly reduced corn exports and led to higher imports. 

To support domestic food consumption amid declining sugar production, the Indian government has limited the conversion of sugar into ethanol, which is its main feedstock. In January 2024, to compensate for this loss, the government raised the procurement price of corn-based ethanol by 29%, bringing it to INR 71.86 (about $0.86) per liter. 

As a result of rising demand, corn prices have surged above those of its competitors, affecting export levels. India, traditionally a major supplier to South and Southeast Asia, is expected to export 84% less corn this year. For the first time since the 1999/00 marketing year, India’s corn imports are set to match its exports. 

Countries like Bangladesh and Nepal, which sourced 78% and 99%, respectively, of their corn imports from India in the previous year, are now turning more to domestic supplies.  Similarly, Vietnam, another key importer of Indian corn, is increasing its imports from South America in response. 

The forecast for 2024/25 shows that strong domestic consumption in India is expected to persist. This will require India’s trading partners to adjust to new dynamics in the regional market over the next year. 

On a global scale, rising demand for corn is a promising trend, especially since we anticipate large international supplies and lower prices for famers in key producing countries. For more information, please refer to the India Coarse Grains Market FeatureIndia Coarse Grains Market Feature and India 2024 Biofuels Annual.

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