Wheat futures edge higher on import tax plan.

MUMBAI: Indian wheat futures were slightly higher on Wednesday on a plan to impose tax on imports of the foodgrain, but a bumper harvest and hopes of stock release in the open market limited gains, analysts said. The August wheat contract was up 0.46 percent at 1,255 rupees per 100 kg at 1:55 p.m.

India's Farm Minister Sharad Pawar last week said a ministerial panel will consider a proposal to levy import tax on wheat. Analysts said India's wheat management at this stage leaves little space for sharp upward or downward movements. "Considering the huge stocks and bumper output we don't think wheat prices will show strong upside or downside movement," said an analyst with Agriwatch Research.

Indian 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 on Monday. Food Corp of India had a stock of 33.58 million tonnes of wheat as on July 1, 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, Farm Minister Sharad pawar said on Tuesday. State-run 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.

Source : economictimes.indiatimes.com