Updates with midday break prices, comment on paragraph 3

By Dewi Kurniawati

JAKARTA, Sept 4 (Reuters) -Malaysian palm oil futures extended declines on Wednesday, tracking a drop in prices of rival vegetable oils and a decline in India's palm oil imports.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.97% to 3,893 ringgit ($895.97) a metric ton by the midday break, and was on track to fall for a third straight session.

"The futures is tracking external market drop on rival oils as well as taking notes on the drop of import from India due to high prices," a Kuala Lumpu-based trader said.

The strengthened ringgit has significantly making palm oil uncompetitive, the trader added.

Dalian's most-active soyoil contract DBYcv1 fell 0.57%, while its palm oil contract DCPcv1 was down 1.58%. The Chicago Board of Trade BOcv1 dropped 0.29%.

Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.

Malaysia's palm oil inventories are expected to have climbed to theirhighest levels in six months at the end of August due to lacklustre export demand, a Reuters survey showed.

India's palm oil imports in August fell 27% from a month ago on ample stocks and as negative margins prompted refiners to curtail purchases of the tropical oil, five dealers said on Tuesday.

Lower purchases by the world's biggest importer of vegetable oils could lead to higher stocks of palm oil in key producers Indonesia and Malaysia, which would weigh the contract.

The Malaysian ringgit MYR=, palm's currency of trade, gained 0.46% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.

China said on Tuesday it plans to start an anti-dumping investigation into canola imports from Canada, after Ottawa moved to impose tariffs on Chinese electric vehicles, sending prices of domestic rapeseed oil futures to a one-month peak.

Oil prices fell on Wednesday, extending a plunge of more than 4% the previous day, on expectations that a political dispute halting Libyan exports could be resolved and concerns over lower global demand growth. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil FCPOc3 may drop to 3,864 ringgit per metric ton, as a double-top formed around 4,003 ringgit, according to Reuters' technical analyst Wang Tao.

($1 = 4.3450 ringgit)

Reporting by Dewi Kurniawati; Editing by Rashmi Aich and Varun H K

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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