MUMBAI, Sept 23 (Reuters) - Palm oil prices are "sizeably undervalued" in comparison with soyoil and the discount is unlikely to be sustained as lower prices will prompt importers to buy more palm oil, a top world oils analyst said on Sunday.
"Palm oil is offered at discounts of more than $250 (per tonne) under soybean oil. I think this is not sustainable. We are going to see world import demand to shift to the more effectively priced palm oil," said Thomas Mielke, editor of Hamburg-based newsletter Oil World.
The increased demand will help the world's top two palm oil producers -- Indonesia and Malaysia -- raise exports and trim inventory that has been depressing palm oil prices, Mielke said in his video presentation to the Globoil India conference here.
On Friday, benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange lost 2 percent to close at 2,763 ringgit ($905) per tonne, after hitting an 11-month low of 2,755 ringgit earlier in the day.
World production of palm oil is likely to rise to a record high of 54.4 million tonnes in 2013 from 51.6 million tonnes estimated for 2012, Mielke added.
Output could rise to 78 million tonnes in 2020 as higher profitability is bringing in additional plantation, he said.
Global output of sunflower oil in the 2012/13 year starting from Oct. 1 is likely to fall by 1.2 million tonnes, and that should give it a price premium over rival soyoil in the second half of the year, Mielke said.
SOYBEAN TO RESUME RALLY
CBOT soybean futures Sc1 hit an all-time high of $17.94-3/4 per bushel this month, but have since fallen nearly 7 percent as farmers in the United States hastened harvesting of their new season crop.
However, that crop is likely to be used up quickly due to higher prices and that will again create tight supplies, allowing prices to resume their rally, Mielke said, without giving any time frame.
"Soybean prices will resume their rally, exceeding $18 a bushel, probably rising to $19 or $20 or above if any problems occur in South America," he said.
Sowing has been progressing in South America, where output was hit by a severe drought last year.
CBOT November soybeans SX2 finished 0.2 percent higher at $16.21-3/4 a bushel on Friday.
