India wheat futures a tad down on imports, harvest

MUMBAI Aug 4 (Reuters) - India's wheat futures ended slightly lower on Wednesday weighed by government's plans not to ban wheat imports despite a bumper harvest and ample stocks, but diplomatic channel exports limited losses, analysts said.

The August wheat contract NWTQ0 on the National Commodity and Derivatives Exchange (NCDEX) ended down 0.30 percent at 1,234.6 rupees per 100 kg.

"Wheat prices have lost their momentum thanks to government control...I think it will be in a narrow range for the short-term... you have stocks and you are still importing," said an analyst with Agriwatch.

The Indian government has no immediate plans to ban imports of wheat by private millers, junior farm minister K.V. Thomas told parliament on Tuesday. See [ID: nSGE6720DO]

Despite the abundance of the grain government allows duty-free import of the commodity to help consumers in southern states of India, where importing is a cheaper option than buying from northern Indian markets.

Food Corp of India had stocks of 33.58 million tonnes of wheat as on July 1, against buffer norms of 17.1 million tonnes, government data showed.

India holds surplus stocks of wheat and rice, but it has severely curtailed grain exports in recent years to ensure steady domestic supplies.

India will sell 300,000 tonnes of wheat and rice through diplomatic channels to Bangladesh and Nepal, Sharad Pawar said last week, as a revival in monsoon rains has boosted crop prospects. See [ID:nSGE66R06W]

The U.S Department of Agriculture estimated India's wheat output at 80.7 million tonnes in a report released on Tuesday. See [ID:nN02261589], while the Indian government estimated it at 80.71 million tonnes, a record harvest. See [ID:nSGE66I0F6]

For a Q+A on India's wheat management. See [ID:nSGE66S0A4] (Reporting by Sourav Mishra; Editing by Harish Nambiar)