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UPDATE 1-Cargill exits coal trading, European power and gas

(Adds details, updates throughout)

LONDON, March 27 (Reuters) - Cargill Inc will cease to trade coal and stop dealing in gas and power in Europe, the global commodities giant said on Thursday, becoming the first traditional trading firm to step away from a sector hard-hit by falling margins.

The firm said separately it was combining its global sugar trading activities with Brazilian firm Copersucar in a new joint venture to be led by Ivo Sarjanovic, the head of Cargill's sugar business. The move will create one of the world's largest traders of the sweetener.

Privately-held Cargill, which employs 140,000 people in 65 countries, said its Geneva-based Energy, Transportation and Metals (ETM) division would close the businesses following a review that identified few opportunities in the sectors.

The announcement follows reports last month of a $100 million-plus loss in U.S. energy markets due to a wrong-way trade during the bitter cold snap at the start of this year. Cargill's head of physical trading at its North American thermal energy arm left the firm in February.

"Significant changes in the coal and European power and gas markets have led Cargill ETM to withdraw from these two sectors," the company said in a statement.

"These changes come after a thorough review of its strategy to offer distinctive, long-term value to its customers."

A spokesman for the company said the decision to close the desks was not related to the North American trading loss, and added that the total number of people affected by the closures would be "less than 50".

Cargill will continue to trade oil, petrochemicals, iron ore and steel, ocean freight and North American gas and power, the statement said.

Cargill's European gas and power trading was centred in Geneva, while the coal operation was also conducted from offices in North America and Singapore.

While many banks have already stripped back their European power and gas desks in recent years, the announcement from the Minneapolis-based firm marks the first time a traditional commodities trader has pulled out.

JPMorgan, Deutsche Bank, Barclays , Bank of America Merrill Lynch and Morgan Stanley have all either reduced or closed their European power and gas trading units.

Coal trading has been hard hit by plunging prices due to a supply glut. On Thursday, Glencore Xstrata said it will suspend operations at its Ravensworth underground coal mine in Australia saying it was no longer financially viable.

While Cargill is one of the largest global commodity traders, its focus has historically been on grains and agricultural markets, rather than energy.

(Additional reporting by Henning Gloystein; editing by Anthony Barker and Keiron Henderson)