Oct 28 (Reuters) - Cotton futures in India, the world's second-largest grower, are expected to rise this week after rains disrupted supplies, while concerns over quality and some damage to the standing crop in parts of Andhra Pradesh are also seen aiding prices.
Rains in Andhra Pradesh, the third largest grower state, have raised concerns about possible damage to the crop and the quality of supplies, spot traders and analysts said.
Andhra Pradesh has received heavy rainfall in the past few days. Rain in the state is expected to continue for another 24 hours, the India Meteorological Department said in a bulletin on its website.
"Heavy rains in our area are expected to spoil the quality of the crop and disrupt harvesting operations," said Naveen Kalva, a trader from Warangal, Andhra Pradesh.
Supplies from the new harvest have started coming into local markets in small quantities and are expected to gain pace in the coming weeks, spot traders said.
The Cotton Association of India (CAI), in its third crop estimate, forecast a 7 percent rise in output to 38.1 million bales of 170 kg each in the year starting October 2013.
The state-run Cotton Advisory Board is expected to meet on Wednesday to forecast production and exports for the 2013/14 season, according to industry officials.
"Cotton is expected to trade range-bound to firm this week because of a short-term supply crunch. The November contract may rise to 20,300-20,400 rupees this week," said Prerana Desai, vice-president of research at Kotak Commodities.
Demand from millers remains steady to weak in the absence of quality produce, traders said.
In September, India withdrew incentives for export of cotton and yarn, a value-added product used by textile mills, a move that could cut exporters' margins in the world's second-biggest exporter of the fibre.
The November cotton contract was 0.56 percent higher at 19,900 rupees per bale of 170 kg each on the Multi Commodity Exchange at 1040 GMT.
On Sept. 24, the government estimated cotton output in 2013/14 at a record high 35.3 million bales against 34 million bales a year earlier.
Desai said the overall trend in the long-run looks weak due to the higher production estimate.
In New York, the December cotton contract on the Intercontinental Exchange was down 0.13 percent at 78.98 cents per lb.
A pick-up in the harvesting operations in the Northern Hemisphere and the return of key U.S. government data that reinforced concerns over slowing demand and excess supplies, weighed on U.S. cotton futures. (Reporting by Meenakshi Sharma; Editing by Anupama Dwivedi)
