By Michael Byrnes

SYDNEY (Reuters) - If Australia replaces even a small percentage of its plastic bags with biodegradable carriers made from grains, it would boost demand for wheat and other grains by 500 percent over 15 years.

"Alternative uses for starches are just going through the roof. (It) is absolutely massive," Kim Hatton, analyst with Pocknee and Associates Consulting, who prepared a report for the Australian grains industry, told Reuters.

Old fashioned starch is an emerging star as a replacement for petrochemicals in biodegradable plastics, tennis shoes, disposable knives, forks and plates, edible crayons, wheat-based kitty litter, and much more

Grains are also seen as a major new raw material in Australia for automobile fuel, pharmaceuticals, livestock feed and meat substitutes.

A report by Pocknee for Australia's annual Grains Week conference last week forecast that demand for the country's grains would jump massively, to 179 million tons in 2020 from around 40 million at present.

Demand for cereals for starch production alone was seen rising to 56.6 million tons in 2020 from nil in 2005. Demand for cereals for ethanol production by 2020 was forecast to rise to 17.6 million tons from 165,000 tons in 2005, while total demand for cereals for emergent uses was seen jumping to 120.7 million tons from only 501,000 tones in 2005.

The forecasts stunned major players in Australia's normally divisive grains industry into pledges of co-operation to produce efficiencies and increased yields to boost supply.