Aug 21 (Reuters) - India's cotton output in the new season beginning October is expected at 39.63 million bales on a likely record acreage, but the figure is slightly lower than the previous year, a top trade body said.

India, the world's second-largest cotton grower, produced 40 million bales of the fibre in the 2013/14 crop year, according to the Cotton Association of India (CAI).

Although the CAI has pegged next year's output at 39.63 million bales, some believe production could touch 41 million bales, as the area under cultivation has gone up.

Despite a slow start to the monsoon season, farmers in India are expected to have raised cotton acreage to a record in 2014/15 year as the crop is less water-intensive.

Growers plant cotton in the rainy months of June and July, with harvests in end-September.

A bumper harvest in India, also the world's second-biggest exporter, for a second straight year could put downward pressure on benchmark New York cotton futures which hit a near five-year low of 62.02 cents on Aug. 1.

If rainfall improves in coming months, India's crop size will be substantially higher than what is being estimated now, said Dhiren Seth, president of the CAI.

As of Aug. 8, farmers had sown cotton on 11.22 million hectares, compared with 11.01 hectares a year before.

"Due to the delayed rains, farmers increased the area under cotton cultivation, as it requires less water. Initial estimates show higher output but a lot will depend on yields," said Arun Kumar Dalal, a trader from the western city of Ahmedabad.

Despite expectations of rising production, exports are expected to be lower in coming years, as local mills have been buying more, while China is purchasing less.

(1 bale = 170 kg) (Reporting by Meenakshi Sharma; editing by Mayank Bhardwaj and Pravin Char)