* Exports seen at 2.5-2.6 mln bales; less than half of target
* Govt to decide on giving extra time for exports in mid-Dec (Adds quote, details)
By Rajendra Jadhav
MUMBAI, Nov 30 (Reuters) - Indian cotton exporters are likely to ship less than half the 5.5 million bales allowed in the 2010/11 season, a senior government official said on Tuesday, which could tighten the global supply situation.
India, the world's second biggest producer and exporter of the fibre, had set the export quota to be shipped between Nov. 1 and Dec. 15, but unseasonal rains have hit supply and the quality of cotton.
"They (exporters) are likely to export 2.5 to 2.6 million bales. Arrivals were low in Gujarat and Maharashtra due to rainfall," a senior official at the Ministry of Textiles, who declined to be named, told Reuters.
The western states of Gujarat and Maharashtra are the top two producers in the country.
"We haven't decided over giving an extension. The government will take a call in mid-December," the official said, when asked whether the ministry would give extra time for exports.
Overseas demand for cotton has increased after bad weather hit crops in China and Pakistan, both leading consumers.
"Unseasonal rains damaged quality of the fibre. Exporters were struggling to buy good quality produce," said Paresh Valia, an exporter based in Mahuva, in Bhavnagar district of Gujarat.
India is likely to produce more than 33 million bales in 2010/11, sharply higher than last year's 29.5 million bales, industry officials said.
"Rains have stopped in Gujarat and Maharashtra. Arrivals will rise sharply in the next few days," Dhiren Sheth, president of the Cotton Association of India, the country's biggest industry body of cotton traders and exporters, told Reuters.
Cotton arrivals in the 2010/11 season that began on Oct. 1 declined to 5.76 million bales as on Nov. 27 from 5.86 million bales a year ago due to the rains, a senior official at state-run Cotton Corp of India said on Monday. See [ID:nMBI000334]
The key U.S. March cotton contract CTH1 was up 0.48 percent at $1.1631 per lb at 0643 GMT.
In India, the most common Shankar-6 variety was trading at 44,200 rupees ($961) per candy (of 356 kg each) on Monday, data with the Cotton Association of India showed. The price hit a record high of 46,200 rupees earlier this month. (1 bale=170 kg) ($1=46 rupees)
