* Beijing mulls releasing 15 pct of strategic reserve
* Chinese import licenses issued
* India delays releasing 2012/13 crop report
* Producers sell around 76 cents - trade

NEW YORK, Aug 23 (Reuters) - Cotton prices eased on Thursday
as producers continued to sell above 76 cents, as the market
digested news that Beijing could sell up to 15 percent of its
large stockpile next month, potentially flooding an already
saturated market.
While the move would be aimed at making room for a fresh
buying spree over the next year, traders fear the release of 1
million tonnes of inventory next month could derail the recent
resurgence in prices.
The tonnage is equivalent to 4.5 million bales. The state
reserve is estimated to have accumulated about 34 million bales
of cotton, almost half the world's global stockpile, and is
expected to increase that hoard by 20 percent in the 2012/13
marketing year.
"Four and a half million bales is fairly significant. That's
going to knock the stuffing out of the market," Sharon Johnson,
senior cotton expert at Knight Futures in Atlanta, said.
Prices showed resilience to the news though.
After falling almost 2 percent earlier in the day, prices
recovered to settle above the psychologically key 76-cent mark
boosted by rallies across commodities and financial markets.
They were buoyed by hopes that global central banks will step in
to give their economies a much-needed boost.
The benchmark December cotton contract on ICE Futures
U.S. settled just 0.22 percent lower at 76.8 cents per lb.
"It's hard to see how it can go higher especially when you
see producers selling as we approach 80 cents."
The news that Beijing is considering the sale came after
authorities in the country, the world's largest producer and
consumer, approved an additional 400,000 tonnes of cotton import
quotas to help its domestic textile mills source more cheap
international supplies.
While the release of new licenses, which had been hoped for
by the trade, would normally be welcomed, the reaction was
subdued, reflecting the depth of concern about falling demand
and rising output.
Research firm Cotton Outlook estimated the global excess at
over 3 million tonnes for the upcoming year to end-July.

With about 250,000 tonnes, equivalent to 1 million bales,
already sitting on consignment in Chinese ports, the
opportunities to sell to Chinese mills with these new licenses
may be limited, traders said.
Some also suggested that with demand in Europe remaining
weak due to the euro-zone debt crisis, the mills may not have
buyers for the product they'll make with the extra raw cotton.
The weather watching continued in India, the world's No. 2
producer, where a drought could hurt crops and cut supplies,
offering some respite from the surplus.
The country's government delayed reporting its
much-anticipated first official production outlook for 2012/13
on Thursday saying it needed more time.
The country produced a record 35.3 million bales in the last
crop year, but parched cotton fields have raised expectations it
could cut exports for the first time in three years.