(Reuters) - Cotton futures in India are expected to fall this week as estimates of higher output due to ample rains and conducive weather and subdued exports are seen weighing on sentiment.

Harvested cotton in India, the world's second-largest grower, typically starts arriving in local markets from September end or October.

"A timely monsoon ensures healthy progress of the plants and is likely to bring in better yield. With favourable conditions, we can expect an improved crop in the forthcoming year," said J. Thulasidharan, president, Indian Cotton Federation (ICF).

Cotton output is expected to touch 37 million bales of 170 kg each in 2013/14 as against over 34 million bales a year earlier, ICF said in a statement.

Some marginal supplies from the new season crop have started coming into the market, but would gather pace only in October.

As of Sept. 12, farmers had planted cotton on 11.35 million hectares, down from 11.44 million hectares a year earlier, date from the farm ministry showed.

The most-active October cotton contract ended 1.92 percent down at 20,900 rupees per bale on the Multi Commodity Exchange.

The cabinet on Thursday, failed to agree on imposing a 10 percent duty on cotton exports, which would have favoured value-added textile exports from domestic mills. A government official said the agriculture ministry opposed the move, which would hurt cotton farmers.

"Prices would fall further as the new supplies would start. In the short term trend in cotton is seen weak," said Manu Mangaldas Shah, a trader from Ahmedabad.

In New York, the December cotton contract on the Intercontinental Exchange was down 0.43 percent at 84.10 cents per lb at 1158 GMT. (Reporting by Meenakshi Sharma; Editing by Anand Basu)