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Dec 8 (Reuters) - Indian wheat futures fell on Thursday following the country's decision to scrap the 10 percent import duty on the grain to augment supplies after droughts in the past two years depleted stocks and raised prices.
The landed cost of imported wheat is nearly 20 percent lower than local supplies and the cut could prompt the local bulk consumers to raise overseas purchases in the next few months.
The import duty removal follows local wheat prices hitting a record high last month, and the Indian rupee touching a record low last month, making imports more expensive.
"There will only be a downside of 2 percent-3 percent in wheat prices in the near term," said a trader from central India. "However, prices may go further down after new arrivals next year," he said.
The January wheat contract settled 2.9 percent lower at 1,982 Indian rupees ($29.44) per 100 kg.
* The December soyoil futures on the National Commodity & Derivatives Exchange (NCDEX) were down about 1 percent at 728.50 rupees per 10 kg at 1150 GMT, tracking overseas markets.
* The most-actively January soybean contract fell 1 percent to 3,064 rupees per 100 kg, as traders continued to face cash crunch following Indian government's decision last month to ban high-value notes.
* The December sugar contract was largely flat and down about 0.2 percent to 3,415 rupees per 100 kg.
* The January rapeseed contract fell 1.3 percent in light trading to 4,644 rupees per 100 kg.
* December corn futures closed largely flat at 1,406 rupees per 100 kg.
$1 = 67.3299 Indian rupees Reporting by Sudarshan Varadhan in New Delhi; Editing by Sherry Jacob-Phillips