Biofuel push fuels kitchen heat: Wheat prices rise as maize diverted to ethanol

Though experts are debating whether E20 ethanol blended fuel is damaging vehicle engines or not, it has started affecting the prices of kitchen staples like atta, maida, and suji used in making bread, biscuits, roti etc.

Prices of wheat and wheat products have increased by about 10% over previous year due to increasing diversion of maize for ethanol, which was earlier sold as animal feed. The by-products of maize-based ethanol called distillers dried grains soluble (DDGS), used as animal feed, is competing and suppressing prices of by-products of wheat, forcing wheat processors to increase prices of atta, maida, suji etc to make up for lower returns on the wheat product called wheat bran.

“Maize DDGS is cheaper than wheat bran by about 80-100%. The milk producers also prefer it as it has higher protein content compared to bran,” said Rohit Khaitan, director, Sri Shyam Agro Biotech Ltd. Wheat processors remove the skin of wheat grains called bran to manufacture aata, maida and suji.

“Bran accounts for 30% of the total output of wheat processing,” said Navneet Chitlangia, president, Roller Flour Millers Federation of India (RFMFI).

The leftover by product of maize-based ethanol has become a source of cheap animal feed available in abundance.The price of more than 90% of wheat bran crashed after maize-based DDGS became the preferred source for ethanol, said industry captains.As a result, wheat millers have increased prices of atta, maida, suji to reduce their losses. To curb further increase in wheat products during festival season, the government had tightened the stock limit on wheat last week. The wheat industry has also demanded opening of wheat bran exports.

“We will be able to control the increase in wheat prices if we can quicken wheat bran export,” said Khaitan.

The prices of atta, maida and suji have softened by about 1-1.5% as demand for these products dropped substantially due to the torrential rainfall in many parts of north India, said millers.

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