China has been attempting to promote alternative fuels such as natural gas, but its efforts have been hampered by a lack of secure supplies and the development of new local markets, according to a report in the Financial Times earlier this week.

China's ethanol production is typically made of corn, cassava and sweet potatoes, but the ethanol producers are largely dependent on government subsidies.

Ethanol blends of 10% have already been mandated in eight Chinese provinces, but according to commodity broker Noble Group, the Chinese Government is thinking of stepping up its biofuels commitment after following the success of Brazil's ethanol program.

The Financial Times spoke to Fabrizio Zichichi, the head of ethanol at Noble Group, who said China was considering mandated ethanol use as a means of combating air pollution and "spreading the wealth" to China's rural communities.

In other commodity news, China's National Development and Reform Commission announced yesterday it would be releasing 552,000 tons of sugar from its stockpile onto the global market to help deal with a shortfall in this year's global production.

Sugar is also a common ethanol feedstock, and forms the basis of Australia's developing ethanol industry, particularly in Queensland, which was hard hit by Cyclone Larry earlier this year.