By Thomas Kutty Abraham

March 3 (Bloomberg) -- India’s cotton exporters, the world’s second-biggest shippers, sought permits to ship more cotton last month to benefit from the highest prices in two years, the textiles ministry said.

Traders sought permits to ship in February 1.32 million bales of cotton, each weighing 170 kilograms, compared with 427,282 bales a year earlier, the ministry said on its Web site today. Exporters registered to ship 5.92 million bales of cotton between October and February, compared with 1.32 million bales in the same period a year earlier, it said.

Rising sales from India, the second-biggest producer, may cool a rally in cotton prices, which have almost doubled in the past year amid speculation that global production will fall short of demand as the economy rebounds.

Cotton prices in New York reached 84.6 cents a pound on March 1, the highest level since March 6, 2008. Futures for May delivery fell 1.44 cents, or 1.7 percent, to 81.85 cents a pound on ICE Futures U.S. yesterday, the biggest drop for a most- active contract since Feb. 5.

Production in India may rise to 29.5 million bales in the year ending Sept. 30, from 29 million bales the previous year, according to the nation’s Cotton Advisory Board.

Shipments in the five months to February jumped to 4.13 million bales, from 1.17 million bales a year earlier, India’s textiles ministry said. Exports may jump to 5.5 million bales this year from 3.5 million a year earlier, according to the Cotton Advisory Board.

Cotton sales by farmers dropped to 22.2 million bales between Oct. 1 and Feb. 27, from 23 million bales a year earlier, Cotton Corp. of India, the nation’s biggest buyer, said on its Web site.