hi srinivas.

this post is in response to your recent question at LinkedIn. i have included your original question below.

dan levine
www.linkedin.com/in/danlevineonline

generally speaking, if sugar (from sugar cane), as opposed to other crops (such as corn), is going to be used for ethanol production, the price of sugar will rise. this could, in turn, make the price of foods that require sugar also rise. this can have additional impacts such as the amount of land that farmers will dedicate for sugar, as opposed to other crops, for human and animal consumption. there are a number of challenges to consider, but again, generally speaking, if sugar prices go up, more farmers will want to grow it.

another interesting twist is that often times, the price that farmers or refineries are paid for their sugar crops must be subsidized by the government, i.e., farmers are getting paid to grow sugar that they might not otherwise grow.

i am not an advocate that we need more "sugar" (or other highly refined foods) in the world, but it will be interesting to see if ethanol demand will affect sugar demand to the point where farmers can fetch a price that no longer has to be subsidized. if the market driven price (including demand for ethanol production) does not exceed the subsidized price, production of suger may NOT increase.

all that being said, ethanol does not appear to be the best source of energy in the long haul. you can learn a lot about that here http://www.alternativeenergy.com/

Links:
http://www.alternativeenergy.com/

Question Details:
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Is there a correlation between sugar production and ethanol production? Does it mean higher use of ethanol reduces sugar production?