Recasts, adds quotes, details

By Ashley Tang and Mei Mei Chu

KUALA LUMPUR/BEIJING, Dec 18 (Reuters) -Global edible oil markets slid on Wednesday, as expectations for a record soybean crop in Brazil early next year and a new U.S. plan to allow gasoline sales with higher ethanol blending raised worries over vegetable oil demand, triggering a selloff.

The prospect that Indonesia's expanded biodiesel mandate may be implemented gradually added pressure on edible oil markets.

Soybean oil prices traded in China dropped to a three-month low, while Malaysian palm oil futures lost more than 4% and U.S. bean oil BOcv1 slid 2.4%.

"Vegetable oil complex is facing headwinds today as overall soybean supplies are likely to increase next year and there is a lack of clarity on implementation of biodiesel mandates in Indonesia," said Pranav Bajoria, director at Singapore-based brokerage Comglobal Pte Ltd.

"Indonesia's plans to introduce B40 have been a key factor lifting prices in recent months. But Indonesian government has yet to allocate higher quotas for blending."

Forecasts of higher soybean supplies in 2025 have been keeping a lid on global oilseed and edible oil prices.

But soybean consumption in China, the world's biggest soybean consumer and importer, is declining due to a downturn in the economy, said Ma Wenfeng, senior analyst at Beijing-based agriculture consultancy Beijing Orient Agribusiness Consultancy.

Brazilian national crop agency Conab and oilseed crushing group Abiove on Thursday increased their estimates for the country's 2025 soybean crop, which could reach record levels following improved weather conditions.

Indonesia's plan to expand its biodiesel mandate from Jan. 1, which has fuelled concerns it could curb global palm oil supplies, looks increasingly likely to be implemented gradually, analysts said, as industry participants seek a phase-in period.

The country's plan to increase its biodiesel blend to 40% palm oil in 2025 from 35% has been underpinning Asian palm oil prices over the past few months.

The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange closed down 195 ringgit, or 4.13%, to 4,530 ringgit ($1,014.10) a metric ton.

The most-active soybean oil contract DBYcv1 on China's Dalian Commodity Exchange fell 3.75% to 7,590 yuan ($1,041.74)per metric ton, its lowest since September. Soyoil prices on the Chicago Board of Trade BOcv1 were down 2.4%.

Traders said higher blending of corn-based ethanol in the United States could reduce the demand for soybean oil used in making biodiesel.

A U.S. government funding bill released on Tuesday included a plan to allow year-round sales of gasoline with a higher ethanol blend, known as E15, in a major win for the corn and ethanol lobbies.

Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.

($1 = 4.4670 ringgit)

($1 = 7.2859 Chinese yuan renminbi)

Reporting by Ashley Tang in Kuala Lumpur and Mei Mei Chu in Beijing; writing and additional reporting by Naveen Thukral in Singapore; Editing by Mrigank Dhaniwala

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