By Carolina Mandl and Tatiana Bautzer
SAO PAULO, June 15 (Reuters) - Bunge Ltd on Friday called off listing its Brazilian sugar and ethanol unit amid a global glut for the sweetener and erratic fuel-pricing policies in the domestic market.
In a statement, the U.S. agricultural commodities trader said it was postponing the initial public offering (IPO) of its Bunge Açúcar & Bioenergia unit due to adverse market conditions.
Bunge filed last month to float its stake in the loss-making unit, which has struggled to reduce its 2.9 billion reais ($763 million) of debt with sugar prices languishing near multi-year lows.
The latest setback was a dramatic reversal last month in how Brazil handles diesel pricing, following a truckers' strike that paralyzed economic activity, according to a person with knowledge of the matter.
A price freeze and tax cuts stoked investor concerns Brazil would resume heavy fuel subsidies after less than a year of letting domestic prices track global markets. Over the past decade, gasoline and diesel subsidies in Brazil have undercut the profitability of sugarcane ethanol, which competes at pumps.
Bunge's Brazilian sugar and ethanol unit IPO had not been an easy deal to pull off even before the discussion on fuel subsidies.
The unit reported a loss of 112 million reais ($29 million) in the first quarter, compared with a loss of 62 million reais in the same period a year earlier, according to the IPO filing.
Investment banking units of JPMorgan Chase & Co, Itaú Unibanco Holding SA and Banco Santander Brasil SA were working with the company on the deal.
Newspaper Valor Economico reported earlier on Friday that Bunge's IPO could be canceled.
$1 = 3.80 reais Reporting by Carolina Mandl and Tatiana Bautzer Editing by Brad Haynes and Paul Simao