(Reuters) - Cotton prices in India may remain firm this week, supported by concerns over lower sowing as farmers may shift to other lucrative crops, while a drop in spot supplies and a pick-up in yarn demand would also help prices.

Sowing of cotton has begun in the country and would pick up with the spread of monsoon rains, traders said.

"Acreage under cotton may drop by more than 5 percent this season as farmers may shift to other remunerative crops such as soybean and guar," said Vedika Narvekar, a senior analyst at Angel Commodities.

The June cotton futures contract ended 1.24 percent up at 18,830 rupees per bale of 170 kg each on the Multi Commodity Exchange.

Cotton supplies in spot markets have been coming down gradually as the season has come to an end.

An improvement in the demand for yarn from local buyers and exporters is expected to keep cotton prices firm, traders and analysts said.

"Cotton prices are likely to stay firm in the short-term because of good yarn demand and limited supplies," said Arun Kumar Dalal, a trader from Ahmedabad in Gujarat.

Dalal said cotton sowing has been good in Punjab and Haryana so far, but overall acreage would drop due to lower sowing in Gujarat and Maharashtra.

The monsoon arrived on cue in Kerala on the southern coast on Saturday.

Sales from government reserves, however, could restrict the upside in the prices.

The Cotton Corporation of India (CCI) had offered to auction 27,000 bales on Monday. It had also offered 63,900 bales to be sold through on e-auction in the last week, a notification on its website showed.

In New York, the most active July contract on the Intercontinental Exchange was up 1.65 percent at 80.67 cents per lb. (Reporting by Meenakshi Sharma; Editing by Jijo Jacob)