by Tony Best

IS THERE RENEWED VIGOUR in recent years after the dramatic decline, some say near-death, of the sugar-cane industry in Barbados and most parts of the Caribbean?

Is ethanol the rainbow behind the cloud that hovered over the sugar industry in Barbados, Jamaica and
St Kitts-Nevis for more than a decade?~~adz:Right~~

The three Caribbean countries are hoping the answer is an emphatic yes. They are looking to ethanol to kick-start interest in growing sugar cane.

"We have a number of countries in the Caribbean that are quite rightly looking at ethanol production from sugar cane," Dr Chelston Brathwaite, the Barbadian who is director-general of the Inter-American Institute for Co-operation on Agriculture, told BARBADOS BUSINESS AUTHORITY.

He had Jamaica, Barbados and St Kitts-Nevis in mind.

But the English-speaking Caribbean is not alone in looking to "fuel cane" in this hemisphere. The United States is moving rapidly to expand its ethanol production from corn so as to reduce its reliance on foreign oil, while the Dominican Republic, Peru, Colombia and a host of Central American states are either planning to get into ethanol production or have already done so.

Production of ethanol in the United States has gone from 175 million gallons in 1980 to an estimated five billion in 2005.

Unlike America where the emphasis is on corn, investors in Latin America and the Caribbean are focusing on ethanol from sugar cane because of the relatively large profit margins.

Brazil is the acknowledged leader while Colombia already produces 360 million litres of ethanol annually, much of it for export.

Rebirth being planned

As in the case of Barbados and St Kitts-Nevis where sugar production plummeted from the historic highs of the '60s and early '70s, Peru, where the industry went into the doldrums, is planning its rebirth.

It intends to add about 25 000 acres a year to the amount of land now under sugar cane cultivation. And the money fuelling such rapid expansion is coming from investors in Spain, Texas, Brazil and Ecuador.~~adz:Right~~

For instance, a Spanish firm intends to build a US$90 million ethanol plant in Peru and a Texas company said
it would invest US$120 million to produce 120 million litres of ethanol a year there as well.

Many of the vehicles in the United States, the Caribbean and elsewhere can run on blends of ethanol and gasoline. In New York the blend is 10 per cent ethanol/90 per cent gasoline. Some newer vehicles can use 85 per cent ethanol and
15 per cent gasoline.

For Latin nations, much of their interest in America can be traced to the region's expanding network of duty-free trade pacts with Washington.

Several factors can heighten Caribbean and Latin American interest in the US. The first is a bill, enacted into law in 2005, requiring American refiners to double the amount of ethanol blended into gasoline by 2012. They have already started to switch to meet the legal requirement.

Secondly, the US government subsidises the growing of sugar cane and provides the ethanol industry with long-standing tax breaks valued at 51 cents a gallon.

Thirdly, half of the gasoline being sold in the US now contains ten per cent ethanol, a blend that leaves the market wide open for exploitation.

"Once oil prices are above US$40 a barrel, the production of ethanol from sugar cane for energy makes sense, Brathwaite said.