Brazil watchdog reviews proposed Raizen, Wilmar trading venture

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SAO PAULO, Dec 23 (Reuters) - Brazilian antitrust watchdog Cade is reviewing a proposed tie-up between sugar and ethanol producer Raizen Energia SA and trader Wilmar International Ltd , as prices for the commodity recover amid tightening global supply.

The proposed joint venture aims to export a type of Brazilian sugar known as VHP, a filing by Cade in the government's official gazzette on Wednesday said.

Cade cited the companies as saying the supply relationship between Raízen and Wilmar would be strengthened by the tie-up.

Morgan Stanley (Xetra: 885836 - news) & Co analysts slightly lowered their forecast for a global deficit of sugar supplies for the annual season ending in 2016. The revision, though small, stands in contrast to wave of upward revisions to experts' deficit projections in recent weeks.

Sugar prices have risen in recent months on expectations of tightening supplies, ending years of surpluses.

Raízen, a joint venture between Cosan SA and Anglo-Dutch Royal Dutch Shell Plc, declined to comment.

Cosan (Sao Paolo: R2:CZLT33S.SA - news) shares rose 0.1 percent in São Paulo trading.

Wilmar representatives in Brazil could not immediately be reached for comment. (Reporting by Roberto Samora; Writing by Tatiana Bautzer and Guillermo Parra-Bernal; editing by Grant McCool)