Mumbai: India wheat futures extended losses for a second session on Tuesday weighed by a bumper harvest and hopes of stock release in the open market, but a proposed tax on imports limited the fall.

The futures may trade lower for another session.

The August wheat contract on the National Commodity and Derivatives Exchange (NCDEX) ended at Rs1,242.4 per 100 kg, down 0.6%.

“Wheat prices will continue to move in a narrow range for the next few days,” said an analyst with Kochi-based JRG Wealth Management.

Agriculture minister Sharad Pawar earlier this month said a ministerial panel will consider a proposal to levy import tax on wheat.

Mills in south India imported wheat primarily from Australia, despite the bumper harvest, to meet their needs as transporting from wheat-growing areas in north India is expensive.

Analysts said India’s wheat management at this stage leaves little space for sharp upward or downward movements.

Farmers harvested 80.71 million tonnes of wheat in 2009, marginally lower than an earlier estimate of 80.98 million tonnes, latest government estimates showed.

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

India may release 2.5-3.0 million tonnes of wheat, rice for states, Pawar said on 20 July.

Food Corp. of India has initiated a process of open market sale through tendering process in Maharashtra, Goa, Tamil Nadu, Andhra Pradesh, Karnataka and Puducherry to sell about 300,000 tonnes of the grain in the beginning.