Maize Farmers Stare at Below-MSP Returns at Harvest, TNAU Warns

Tamil Nadu Agricultural University's Domestic and Export Market Intelligence Cell (DEMIC), operating under its Centre for Agricultural and Rural Development Studies (CARDS), has issued a pre-sowing price alert projecting that good-quality maize is likely to fetch ₹2,200–₹2,400 per quintal at harvest in October–November 2026.

The Union government has fixed the MSP for maize at ₹2,410 per quintal for the 2026-27 marketing season — a marginal increase of just ₹10 over the previous season's ₹2,400. At the lower end of TNAU's forecast range, farmers could receive ₹210 below the support price, and even the upper end falls short of MSP.

The forecast is grounded in a 15-year price analysis of the Udumalpet regulated market, supplemented by a field-level market survey. TNAU has explicitly advised farmers to incorporate this price outlook into their sowing decisions — a signal that the university considers the risk material enough to influence cropping choices before seeds go into the ground.

India's maize production is estimated at a record 55.10 million tonnes in 2025-26, according to the Third Advance Estimates of the Union Ministry of Agriculture and Farmers' Welfare. That volume alone would be sufficient to depress prices at harvest — but the headwinds do not end there.

The increased availability of Food Corporation of India (FCI) rice for ethanol production has handed distilleries greater flexibility in choosing between grain feedstocks. When rice is competitively priced and available, distilleries can reduce their maize intake, directly limiting the price support that the ethanol sector might otherwise provide to maize growers.

The trade policy front has added another layer of pressure. In February 2026, India and the United States agreed, under an interim trade deal framework, to allow duty-free imports of US soya oil and distillers dried grains with solubles (DDGS) — a co-product of maize-based ethanol used as animal feed. Following the announcement, maize prices fell in February and farmers were forced to sell below MSP, a pattern that could recur if DDGS imports accelerate and displace domestic maize demand in the feed segment.

India's ethanol blending programme has transformed maize into a strategic industrial commodity. In the current Ethanol Supply Year (ESY) 2025-26 — running November to October — grain-based ethanol accounts for nearly 67 per cent of total ethanol supplies.

Within the grain-based segment, maize is the single largest feedstock. Up to June 2026, total ethanol supplies reached approximately 717 crore litres, of which maize contributed 258 crore litres (around 36 per cent). FCI rice followed with roughly 177 crore litres (nearly 25 per cent), while sugarcane juice accounted for about 20 per cent.

Despite this volume leadership, the structural competition between maize and FCI rice as distillery inputs means that maize's dominance as a feedstock does not automatically translate into firm prices for farmers. As long as distilleries can switch between feedstocks based on relative cost, the price benefits of ethanol demand are partly neutralised for maize growers — particularly in a year of record domestic supply.

The price outlook is not uniformly bearish — several demand-side factors could provide partial support to maize prices through the harvest season.

On the demand side, robust offtake from ethanol distilleries, the poultry sector, feed compounders, and other industrial users remains a constructive force. TNAU notes that maize's role has expanded into bioplastics and other emerging industrial applications, broadening the demand base beyond traditional channels.

On the supply side, El Niño-associated below-normal rainfall poses a production risk across major maize-growing states — Karnataka, Madhya Pradesh, Andhra Pradesh, Bihar, and West Bengal — which could trim output and provide a price floor.

Additional wildcards flagged by TNAU include:

• The carryover effect of last year's bumper harvest on beginning stocks
• Disruptions to export trade stemming from the West Asia crisis
• Rising fuel and logistics costs affecting domestic market flows

The net price outcome will depend on how these competing forces interact between now and the October–November harvest window.