OUTLOOK-India cotton seen higher on soaring exports

MUMBAI, March 8 (Reuters) - India's cotton prices may remain higher this week after a federal minister backed the decision not to curb soaring exports of the commodity despite domestic price rise, analysts and traders said.

"There is sufficient stock of cotton in the country to meet the demand of the mills as well as export. No proposal is under consideration for banning cotton export at this stage," Panabaaka Lakshmi, the junior textiles minister told parliament last week. See [ID:nSGE6230HP]Earlier, A B Joshi, textile commissioner and chairman of Cotton Advisory Board (CAB) told Reuters about government's stand not to ban exports.India's cotton export in the first five months of 2009/10 cotton year jumped by 253 percent to 4.13 million bales, data on textile ministry's website showed.

The cotton year runs between October and September.Prices have risen about four percent in the past three weeks after the govt clarified unabated exports, analysts said."South Indian mills have become active buyers....export demand has increased from Bangladesh and Pakistan in the last week," said an official with the state-run procurer and exporter, Cotton Corp of India Ltd.

Analyst and traders said falling arrivals are also likely to support prices.
The daily average arrivals have dropped to 135,000 bales from about 160,000 bales a week ago, the Cotton Corp official said.

India's cotton arrivals stood at 23.1 million bales of 170 kg as on March 6, down from 23.8 million bales during the same period last year.

Arrivals have fallen sharply in Maharashtra, but rose in Gujarat this year, data showed.Arrivals rose about 22 percent to 7.6 million bales in Gujarat, while they were down over 21 percent to 4.8 million bales in Maharashtra.

The two states are India's top cotton producers.International cotton prices touched a two year high earlier this month. See [ID:nN03399796]
(Editing by Prem Udayabhanu)

Source:
http://in.reuters.com/article/domesticNews/idINSGE6270I520100308?sp=true