Sugar cane ideal for ethanol but few producing it

KAMUELA, Hawaii, Aug 6 (Reuters) - Sugar cane is an ideal feedstock to manufacture the alternate biofuel ethanol, but only a small number of countries are producing ethanol from sugar crops, a report here said.

Gareth Forber, head of the sugar team at analyst LMC International, said on Tuesday at the annual meeting of the American Sugar Alliance that countries seemingly ideally suited to produce ethanol from cane are top producer Brazil, Australia, Thailand, Colombia, and Guatemala among others because of investments to build plants and incentives from governments.

But he said the attractiveness of sugar depends on its trade status against other crops, the level of protection given the sugar industry compared to other potential feedstock, and the existence of a suitable government policy towards biofuels.

Forber said there is also a need to answer questions especially with the debate on food versus fuel raging and how can ethanol be included in cane payment formulas.

Brazil and the U.S. dominate ethanol output in the world.

The flex fuel car program in Brazil enabled the Latin American country to switch between producing ethanol and sugar.

U.S. ethanol capacity has risen 46 percent since last July to more than 9.4 billion gallons per year as producers expect government mandates and rising oil prices to open new markets. (Reporting by Rene Pastor, Editing by John Picinich)