Palm oil could rise by $40 a tonne in March as demand rises because of its attractive price compared to other edible oils, Hamburg-based newsletter Oil World said.
The global soyabean shortage will curb soyabean crushings, which will help push soyaoil prices up further and turn buyers towards palm, the newsletter said.
Sun and rapeoil prices are also rising. "Palm oil import demand is now picking up as consumers take advantage of the large price discounts relative to soya, sun and rapeoils," it said in a report released on Tuesday.
"This will further reduce Malaysian and world palm oil stocks in the next one to two months. We expect palm oil prices to rally by $40 within the next four weeks."
Improved weather in South America's soyabean exporting countries could temper the overall price bullishness by triggering fund selling and profit taking in the futures market, it said.
But it expects setbacks will be temporary and that prices will continue to trend higher on average in the next one to two months.