Updated with midday break prices, analyst comment on paragraph 3

By Dewi Kurniawati

JAKARTA, Nov 7 (Reuters) -Malaysian palm oil futures slipped marginally on Thursday, reversing early gains due to rising premiums over gasoil and Indonesia's proposal of a 50% palm oil-blended biodiesel.

The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange was down 2 ringgit or 0.04%, to 4,915 ringgit ($1,114.77) a metric ton by the midday break.

The contract had risen about 2% earlier in the session.

Futures were unable to hold gains on various reasons, starting from palm oil's rising premium over gasoil, and then Indonesia has proposed B50 biodiesel mix in 2028, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

A higher premium means lower use in biofuels, he said.

Indonesia's government is proposing to increase the mandatory blend of palm oil-based fuel in biodiesel to 50% in 2028, Edi Wibowo, director of bioenergy at Energy and Mineral Resources Ministry, told an industry conference on Thursday.

India's vegetable oil imports are estimated to decline further in the 2024-25 season to 15 million tons, as favourable weather will likely boost domestic production, an industry group said at the conference.

India's palm oil imports surged 59% in October to a three-month high compared to the previous month, as refiners boosted purchases to replenish stocks depleted by lower-than-usual imports in recent months and a strong festive demand.

Dalian's most-active soyoil contract DBYcv1 rose 1.62%, while its palm oil contract DCPcv1 gained 2.26%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.09%.

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

The ringgit MYR=, palm's currency of trade, weakened 0.23% against the U.S. dollar, making the vegetable oil cheaper for buyers holding foreign currencies.

Oil prices rose following a sell-off triggered by the U.S. presidential election, as risks to oil supply from a Trump presidency and a hurricane building in the Gulf Coast outweighed a stronger U.S. dollar and higher inventories. O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

($1 = 4.4090 ringgit)

Reporting by Dewi Kurniawati; Editing by Sumana Nandy and Varun H K

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