18 Sept 2025
India’s aggressive drive to boost ethanol production is raising fresh concerns for the country’s edible oil security, with reports indicating that farmers are shifting away from oilseeds to crops like maize and rice.
The government’s policy to achieve 20% ethanol blending with petrol has led to greater diversion of grains for fuel production. While this supports energy goals, it has created a glut of distillers dried grains with solubles (DDGS) — a protein-rich byproduct used in animal feed.
Industry data shows that India’s DDGS output has surged nearly 13-fold in just two years, reaching 5.5 million tonnes (mt) by 2025. The oversupply has disrupted the feed market, as manufacturers increasingly substitute oilmeal with cheaper DDGS, eroding demand for traditional protein sources like soybean and groundnut meal.
“DDGS is a real headache,” said Aashish Acharya, Vice President, Patanjali Foods Ltd. “Feed manufacturers are replacing meal with DDGS as it is cheaper.”
The ripple effect is visible in cropping patterns. According to government data, the acreage under oilseeds — including soybeans and groundnuts — fell by 4% year-on-year, while maize acreage surged by 10.5%, marking a record high.
This trend poses a challenge to the government’s ambition of raising domestic edible oil production to 25.45 mt by 2030–31, up from the current 12.7 mt, in order to meet at least 72% of projected demand.
“Rising DDGS supplies are obstructing oilseed expansion. At this rate, India’s edible oil imports could exceed 20 mt within the next 6–7 years,” cautioned B.V. Mehta, Executive Director of the Solvent Extractors’ Association (SEA).
Meanwhile, utilization of the DDGS surplus remains limited. An edible oil producer in Lucknow estimated that only half of the DDGS stillage generated this year will be consumed domestically. Though exports are gradually increasing, they remain modest, with millers and distillers now seeking incentives to ship both meal and DDGS abroad.