MUMBAI, Sept 30 (Reuters) - Indian sugar futures eased on Tuesday as overnight falls in crude oil prices spurred expectations that demand for the cane-based biofuel ethanol would fall, triggering profit-taking.

Losses were limited by firm demand in the spot market, which rose after the government, which controls the sector, on Monday allowed millers more time to sell sugar from the September quota.

At 2:44 p.m. (0914 GMT), October futures NSMV8 on the National Commodity and Derivatives Exchange had eased 0.06 percent to 1,770 rupees ($37.7) per 100 kg.

November futures NSMX8 fell 0.22 percent to 1,825 rupees. The contract had risen 6.4 percent in the two weeks to Monday.

Prices in the spot market in Maharashtra, the largest sugar producer, rose nearly 1 percent to 1,716.4 rupees.

U.S. crude oil prices plunged more than $10 a barrel late on Monday after the U.S. House of Representatives rejected a $700 billion plan to bail out the crisis-hit financial sector. [ID:nN29406570].

“The market is also awaiting government’s decision on the quantity of sugar to be sold in the three months to December,” an analyst at ICICI Direct said.

Traders are expecting the government, which fixes monthly and quarterly supplies for the open market, may allow millers to sell a higher quantity in the October-December period.

It released 4.2 million tonnes for the same quarter last year. ($1=47 rupees) (Reporting by Abhishek Shanker, Editing by Mark Williams)