UPDATE 2-Sappi FY profit evaporates, sees better 2010

* FY underlying opg profit $33 mln vs $366 mln

* Sees 2010 financial years "significantly" better than 2009

* Shares almost 2 percent higher, other paper makers also up

(Recasts, adds details, analyst, shares)

By Agnieszka Flak

JOHANNESBURG, Nov 9 (Reuters) - Sappi (SAPJ.J), the world's largest maker of fine paper used in glossy magazines such as Vogue, predicted returning demand and firmer prices would boost its 2010 performance, even as 2009 profits collapsed.

Chief Executive Ralph Boettger said on Monday he expected demand for Sappi's major products to improve in most markets in the 2010 financial year and said he saw the possibility of price increases at the start of next year in North America and Europe.

"We believe that conditions for prices to firm are improving and we hope that we would start seeing conditions being favourable for price increases from January onwards," he told journalists in a conference call, but added that he expects South Africa to remain under pressure due to the strong rand.

South African rival Mondi (MNDJ.J) last month proposed price increases in most of its paper grades, aiming to boost earnings next year as volumes pick up from lows reached during the economic slowdown. [ID:nLR320032]