Updates midday prices, adds trader's comment

KUALA LUMPUR, Dec 19 (Reuters) -Malaysian palm oil futures declined on Thursday for a fifth straight session, as uncertainty over Indonesian and U.S. biofuel policies weighed on the market.

The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange slid 44 ringgit, or 0.97%, to 4,485 ringgit ($996.45) a metric ton at the midday break.

Crude palm oil prices extended its sell-off from Wednesday following a change in sentimentsin the global vegetable oil markets this week, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin group.

"This was mostly due to the uncertainty over the Indonesia and U.S. biofuel policies amid higher vegetable oil prices, thus incurring higher subsidies for the respective programmes."

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

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. Traders had said that higher blending of corn-based ethanol in the U.S. could reduce the demand for soybean oil used in making biodiesel.

Dalian's most-active soyoil contract DBYcv1 fell 3.32%, while its palm oil contract DCPcv1 shed 2.6%. Soyoil prices on the Chicago Board of Trade BOcv1 eased 0.4%.

Palm oil tracks price movements of rival edible oils as it competesfor a share in the global vegetable oils market.

The ringgit MYR=, palm's currency of trade, weakened 0.76% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.

Palm oil may fall into 4,273-4,370 ringgit per metric ton, driven by a wave c, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.5010 ringgit)

Reporting by Ashley Tang; Editing by Subhranshu Sahu and Sumana Nandy

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