MUMBAI, Jan 24 (Reuters) - India’s state of Maharashtra, the country’s second-biggest cotton producing state, has cut its forecast for output of the fibre by 37 percent from its September outlook as a pest infestation has reduced yields, a senior government official told Reuters.

Maharashtra’s output is now forecast to drop to 6 million bales of 170 kg each for the 2017/18 marketing year that started on Oct. 1, the source said. That is down from 10.7 million bales produced in the 2016/17 marketing year.

The forecast is down because of an infestation of the pink bollworm that has cut yields.

The drop in the output could lift local prices and reduce the exports from India, the world’s biggest cotton producer, during the 2017/18 marketing year.

“As harvesting started, farmers realised the impact of the pink boll worm pest on the crop. Yield were substantially lower than normal,” said the official, who declined to be named as the estimate has not been published.

Maharashtra usually accounts for over a quarter of the India’s production, which the government has estimated at 37.7 million bales for the current marketing year.

The reduction in Maharashtra’s production will slash the country’s output and keep prices firm in the local market, said Pradip Jain, owner of cotton trader Mahavir Ginning and Pressing.

Cotton prices have surged 12 percent in the past eight weeks as spot markets were getting lower-than-normal supplies from the new season crop.

India’s cotton exports could fall to 5 million bales, nearly a quarter below earlier estimates, said Atul Ganatra, president of Cotton Association of India.

Pink bollworms consume the cotton fibre and seeds inside the boll, or fruit, of the plant and cut the amount of fibre harvested.