KUALA LUMPUR, May 21 (Reuters) - Main edible oil consumers, such as India,China and Pakistan, still favour palm oil because of higher soyoil pricesdespite harvests in Argentina, traders said on Tuesday.South American crude, degummed soyoil was last quoted at $623.50 atonne for June shipment C&F India after tax against $586 for crude palmoil (CPO). India, the world's largest edible oil importer, buys palm oilfrom Malaysia and Indonesia."If anyone has to make a choice today, obviously they would prefer tobuy CPO," said one trader in Kuala Lumpur.India's falling domestic stocks, seen at around 200,000 tonnes, and aseasonal decline in the arrivals of oilseeds from the summer crop, wereexpected to boost palm oil imports to 300,000 tonnes in May, up from200,000 tonnes in April, traders said.India would be buying crude palm oil and refine the oil domesticallybecause RBD palm olein was expensive at $736 a tonne C&F India, they said.Traders said chaos in Argentina's grain market, triggered by a plan bya major farm group to halt sale of grains and oilseeds, will restrictexports from the world's third largest soybean producer after the UnitedStates and Brazil.This will encourage buyers to turn to soyoil, a direct competitor topalm oil, said traders.

CONVENIENT"Forget about India when it comes to olein. But for the rest of theworld olein is very well workable. South American crude, degummed soyoilis quoted at $390 a tonne FOB, but China can buy our olein at $370," saidthe Kuala Lumpur trader."China can get the refined product at less freight rates and fastershipping period. That's why our olein is more convenient for them," hesaid.India's soyoil imports were expected to reach around 100,000 tonnes inMay against 87,300 tonnes in April, but traders said problems in Argentinawould limit India's appetite for the oil.A major Argentine farm group said last week it planned to halt the saleof grains and oilseeds from May 26 to 29 to protest the government'seconomic policies.The protest could disrupt local trade in Argentina, where the soy andcorn harvests are in full force and numerous export contracts must befilled.Traders and analysts said Malaysia's crude palm oil futures market wastechnically friendly due to prospects of better demand, adding thatplayers also cautiously watched a heatwave in India which has killed morethan 600 people in the country's south."The Indians are worried they can't plant soybean if the monsoondoesn't come," said one trader.The heatwave is the worst in four years and comes ahead of the annualmonsoon rains which usually first hit the southern coast of Kerala in Juneand then fan out over the next three months. Weather officials have saidIndia is on course for a normal monsoon.By midday on Tuesday, the benchmark third-month August contract inMalaysia's palm oil market was up 12 ringgit at 1,310 ringgit ($344.74) atonne. Technical analysts pegged the next resistance point at 1,325ringgit.

(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)