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UPDATE 1-Copersucar says bulk of sugar sales hedged; sees ethanol market recovery

(New throughout, adds details)

SAO PAULO/NEW YORK, June 23 (Reuters) - Brazilian sugar and ethanol merchant Copersucar SA said on Tuesday that the bulk of its sugar sales for the 2020-21 season have been hedged already, as the company prepares for a busy sugar trading campaign in the new season.

Copersucar, who partners with Cargill in the world's largest sugar trader Alvean Sugar SL, sees a sharp increase in Brazilian exports, while projecting that global demand for sugar will remain stable in 2020-21.

Copersucar executives told reporters during a earnings call on Tuesday that the company, as well as other sugar producers in Brazil, took the opportunity when sugar prices peaked earlier this year to hedge a large amount of future sales.

"A large part of the crop is already hedged. Something around 65% to 75%," said chief financial officer Tomás Caetano Manzano.

The Brazilian group is in charge of selling sugar and ethanol production from 30 associated plants that will increase sugar output in the new season due to better prices.

The company, which controls U.S. ethanol trader Eco-Energy, sees a gradual recovery in the global ethanol markets and possibly higher U.S. exports to Brazil later this year.

Manzano said U.S.-Brazil ethanol trade has been quiet recently with weak demand in both markets, but noted that Brazil is producing much more sugar this year, and less ethanol. This could open the window for U.S. exports later this year, particularly if fuel demand in Brazil's Northeast recovers quickly.

Copersucar said it sold 14.2 billion liters of ethanol in 2019-20, near 3% more than in the previous season. Most of that volume came from Eco-Energy in the U.S., whose volumes increased from 9 billion liters to 9.2 billion liters.

But total sugar sales fell last season to 3.7 million tonnes from 3.8 million tonnes, as Brazil had a crop with higher ethanol production at the expense of sugar.

Copersucar revenues increased 5% to 30 billion reais ($5.82 billion) in 2019-20. Net profit was up 31% to 136 million reais.

($1 = 5.1558 reais) (Reporting by Roberto Samora and Marcelo Teixeira; Editing by David Gregorio Editing by Chizu Nomiyama)

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