Traditionally the maize crop in India had two large user industries –

1. More than half of the produce would go in the animal feed right from poultry (chicken) to cattle (dairy).
2. Followed by the starch industry, which further supplies to paper, textile and food among others.

The remaining 10-15% would be consumed by humans as sweet corn, makki-ki-roti (corn flour) or corn flakes.

Until 2020, India was producing about 28 million tons of maize annually which was more than sufficient to meet the above requirements leading to stable price of Rs 15-20 per kilo.

Then came our ethanol policy which allowed maize to be used as feedstock for producing ethanol. To meet India’s ambitious E20 target (blending of 20% ethanol in petrol), maize was going to play a critical role and thereby create an eventual additional annual demand of 10-12mn tons of maize.

The supply however cannot come over night which was going to create a major imbalance over the next few years and a consistent increase in maize prices; going as high as Rs 30 per kilo.

This turned out to be a shock for traditional consumers of maize. The poultry operators saw big jump in their cost structure without a commensurate jump in realisation pushing them into losses. Similarly, corn starch industry too has been reeling under major cost pressure. For instance, the starch realization as recent as Q2FY26 was Rs 32 per kilo which is below the cost of production of Rs 40, leading to shut down of many smaller starch units.

Importing maize was never a solution, as India uses non-GMO corn whereas most of the world, barring the likes of Ukraine or Myanmar, have moved to GMO corn. GMO stands for genetically modified variety, optimized for pest attack as well as improved yield of 3-5x per acre.

Since imports wasn’t a solution, we had to let economics 101 play out. Would high maize prices in the market as well as Govt’s minimum support price (MSP) at Rs 24 per kilo encourage many more farmers to shift to maize and thereby increase supply in coming years?

Turns out the answer is a resounding ‘yes’! 

In 2025-26 crop season, India’s maize production is expected to cross a staggering 45mn tons. The latest kharif crop, harvested during October & November 2025, has been bumper and the prices have crashed back to sub-20 for the first time in at least three years.

Crop Season	Maize Production (Mn Tons)
2019-20	28.7
2020-21	31.5
2021-22	34
2022-23	38
2023-24	37.7
2024-25	42.3
2025-26E	~45

For farming community, the perception of maize shifted from cereal grain to high-value cash crop. Maize is also easier to manage given it requires much lesser water than sugarcane or rice and the fact that it can be sown 2-3 times a year (90-100 day cycle from sowing to harvesting).

India is experiencing an over production of rice leading to excess stock with FCI. Accordingly, government has recently mandated a minimum usage of 40% rice in ethanol production, which is expected to reduce maize demand by about 2-3mn tons in 2026.

To conclude, the situation has now turned upside down with falling demand amidst rising supply, putting pressure on maize prices.

The jury is still out whether this is a temporary relief or here to stay. Govt’s MSP at Rs 24 per kilo for maize continues to be attractive for farmers. Even though the mandi price of sub-20 is lower than MSP, there may not be any alternate crops which are commercially better given the short cycle of maize or viability (low water requirement).

Either ways, it seems the cycle has once again turned in favour of maize consumers, at least for next couple of years. 

Last few years, India could hardly export any starch as our maize price was far higher than global price. We were instead exporting sugar & rice, equivalent to exporting water, which is a scarce resource and should be conserved. With maize price falling under Rs 20 per kilo, we should again be competitive in global starch market and bring in some precious forex.

Risks & Uncertainties

• Being an agricultural crop the maize production can vary dramatically next year or the following year, based on the pest attack, weather pattern, monsoon etc.
• The demand from ethanol can once again spike next year based on govt’s changing priorities and balancing act between fuel blending goals & availability of sugarcane & rice.
   

Gujarat Ambuja Exports Ltd. 

GAEL has a 25-30% share in India’s installed capacity of starch and over 50% share in high value-add starch derivatives like sorbitol, maltose, dextrose etc. It is also forward integrating into starch fermentation (specialty chemicals). We had invested in this company in 2017 at Rs 1,500 Cr market cap. and later exited at Rs 8,500 Cr market cap. in early 2024.

Stalwart’s founder & CIO, Jatin Khemani, had explained company’s business model at TIA, Chennai in 2018 (YouTube link shared at the bottom of the post).

In last 11+ years of Stalwart, we have generally been the first or amongst the first few institution(s) to cover/own niche small-cap companies with good execution. We are able to do this as we don’t depend on sell-side/broker coverage to source/validate ideas. Instead, as a team we enjoy discovering interesting ideas bottom-up through in-house research. We operate from Delhi, away from all the noise of conferences & institutional imperatives in Mumbai.

This is a thematic post covering how one insight (maize cycle turning favourable) can lead to discovering multiple opportunities across a value chain. For curious minds, we are also sharing a few listed companies operating in different sectors and having maize as their dominant feedstock:

Starch Companies	Market Cap (Rs Cr)
Gujarat Ambuja Exports	5,675
Sanstar	1,660
Regaal	750
Sukhjit Starch	460

Poultry & Animal Feed	Market Cap (Rs Cr)
Godrej Agrovet	11,000
Venky’s	2,000
KSE	715

Ethanol & ENA (Alcohol)	Market Cap (Rs Cr)
Radico Khaitan	42,734
Triveni Engineering & Industries	8,510
India Glycols	7,150
TruAlt Bioenergy	3,500
Globus Spirits	2,860
Associated Alcohols & Breweries	1,800
Godavari Biorefineries	1,390
BCL Industries	935
Gulshan Polyol	860

Stalwart’s original research on Gujarat Ambuja Exports Ltd: 

Disclosure: Stalwart PMS presently owns GAEL & Venky’s in the fund.
The fund doesn’t invest in sin stocks; tobacco, alcohol & gambling, accordingly there is NO ownership in any of the ENA stocks.

Disclaimer: This is not a recommendation to buy/hold/sell. Please consult your financial advisor before acting on it. Read the complete disclaimer here.