From our friends down under:

Bagasse paper a reality

and the interesting clip:
 

However the use of bagasse to manufacture paper, which would seem to be a logical application for the by-product, has always alluded the industry in Australia.

Its fibres are so short there is no strength in the paper and there is no easily obtained and cheap, long strand fibre available to reinforce it.

However that is not the case in other countries as bagasse based paper is produced in South Africa, India and China, where it finds a ready market as toilet tissue and hand towels because it is softer than similar products made from forest pulp.

Link to the whole article.