Updates with closing price

KUALA LUMPUR, Sept 17 (Reuters) -Malaysian palm oil futures fell for a third straight session onTuesday, when the market reopened after a holiday, weighed down by India's decision to raise its import tax on edible oils.

The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange closed 40 ringgit, or 1.06%, lower at 3,735 ringgit ($878.00) a metric ton.

The contract shrunk 2.2% last week.

Malaysian palm oil futures slipped due to India hiking itsimport duty, a Kuala Lumpur-based trader said.

India, the biggest importer of edible oils, imposed a 20% basic customs duty on crude palm oil, crude soyoil and crude sunflower oil from Sept. 14.

The move will effectively increase the total import duty on the three oils to 27.5% from 5.5% as they are subject to India's Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.

Oil prices were steady on Tuesday, after rising more than $1 in the previous session, as traders assessed concerns over U.S. production in the aftermath of Hurricane Francine and also the prospect of lower U.S. crude stockpiles.O/R

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

Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.92%.China's Dalian Commodity Exchange was closed for a holiday.

Palm oil prices track rival edible oils, as they compete for a share of the global vegetable oils market.

The ringgit MYR=, palm's currency of trade, strengthened 1.02%against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Malaysia maintained its October export tax for crude palm oil at 8% and lowered its reference price, per a circular on the Malaysian Palm Oil Board website.

($1 = 4.2540 ringgit)

Reporting by Danial Azhar; Editing by Sherry Jacob-Phillips, Sumana Nandy and Sonia Cheema

For a table on Malaysian physical palm oil prices, including refined oil, Reuters Terminal users can double click on or type OILS/MY01. * To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in OILS/ASIA2 and press enter, or double click between the brackets. * Reuters Terminal users can see cash and futures edible oil prices by double clicking on the codes in the brackets: To go to the next page in the same chain, hit F12. To go back, hit F11. Vegetable oils OILS/ASIA1 Malaysian palm oil exports SGSPALM1 CBOT soyoil futures 0#BO: CBOT soybean futures 0#S: Indian solvent SOLVENT01 Dalian Commodity Exchange DC/MENU Dalian soyoil futures 0#DBY: Dalian refined palm oil futures 0#DCP: Zhengzhou rapeseed oil 0#COI: European edible oil prices/trades OILS/E