India cotton seen up on demand, rains

India cotton seen up on demand, rains

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(Reuters) - Cotton prices in India are expected to rise in the current weak due to buying by exporters and millers, and concerns of a delay in arrivals on recent rains in key growing areas, said traders and dealers.

"It has been raining in key cotton growing areas and it could delay harvesting," said Bachubhai Antrolia, vice-president, Saurashtra Ginners Association.

Cotton harvesting in India, the world's second largest producer and exporter, usually begins by the middle of September.

Rains in Gujarat, the largest cotton producing state in the country, were up to 200 percent above normal in the week ended August 31, according to the India Meteorological Department.

On Monday, the most traded Shankar-6 variety rose 1,000 rupees to 38,200 rupees per candy of 356 kg, data from trade body Cotton Association of India showed.

Last month, cotton prices in the country declined over 50 percent from their record high of 61,700 rupees per candy of 356 kg each in March, to touch a 12-month low of 30,000 rupees per candy as demand from mills, particularly yarn makers, was lower.

India has allowed unrestricted exports for the remainder of the current season due to abundant availability of stocks.

Traders expect the country to export an additional 255,000 tonnes of cotton in these two months.

India's cotton output estimate for 2010/11 has been revised to 32.5 million bales from the earlier 31.2 million bales.

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