Jan 14 (Reuters) - Indian cotton futures are expected to trade firm this week on good demand from exporters amid a fall in local supplies due to a cold wave in the top growing regions and as farmers hold back on hopes of better prices.

However, expectations of a revival in local supplies in the coming days across the country as the weather improves and less demand from China could weigh on prices, spot traders said.

Indian origin cotton is receiving good orders from buyers in Pakistan and Bangladesh, while China is buying more of cotton yarn in a bid to bypass duties on the raw fibre, they said. India is the world's second-largest cotton producer.

"China is buying less of raw cotton from India but the fall has been compensated by Pakistan and Bangladesh," said Manu Mangaldas Shah, a trader from Ahmedabad, a key market in Gujarat state, the top cotton producer in the country.

Daily cotton supplies have fallen to 160,000-170,000 bales of 170 kg each from 170,000-180,000 in the previous week across India due to the cold and a local harvest festival, spot traders said.

They expect daily supplies to rise to around 180,000 bales by the end of this week.

India's commodity exchanges and spot markets were shut on Tuesday due to a local harvest festival.

The most-active March cotton contract on ICE Futures U.S. was down 0.24 percent at 83.48 cents per pound at 1139 GMT.

The U.S. government on Friday boosted its forecast for record global cotton inventories for the 2013/14 crop year for the fifth time this season, sending prices lower and reinforcing worries over ballooning stocks and waning global demand. (Reporting by Meenakshi Sharma; Editing by Prateek Chatterjee)