Dec 13 (Reuters) - Cotton prices in India are expected to fall this week on rising arrivals in the physical market amidst weak demand from exporters and yarn makers and weak global cues.

Daily arrivals in spot markets rose to 150,000 bales of 170 kg each from 100,000 bales in previous week, data from state-run Cotton Corporation of India (CCI)showed.

Cotton arrivals in India's spot markets till Dec. 11 in the 2011/12 season fell 25.5 percent on year to 6.2 million bales of 170 kg each, (CCI) said.

"Demand from exporters and yarn makers is very low and a steep fall in overseas prices have further diminished the hopes of a recovery," said Hirenbhai Shah, a trader based in Rajkot, Gujarat, the largest producer of the fibre.

New York cotton futures finished at a 16-month low on Monday on expectation of lower global demand amid recession fears.

On Monday, the most traded Shankar-6 variety fell 300 rupees to 34,800 rupees per candy, data from the trade body Cotton Association of India showed.

Prices in India had hit a record high of 61,700 rupees per candy in March, tracking global prices that rose to an all-time high of $2.27 per lb, as adverse weather conditions in key growing areas disrupted supplies.

India is expected to ship nearly 8 million bales in the current cotton year, which began on Oct.1.

Fibre prices in India are likely to fall substantially in the next two months as the biggest importer, China, cuts orders at a time when domestic supplies are set to peak.