India's cotton output set to jump 14%, exports to remain steady: Trade body

India's cotton production in 2019/20 is likely to jump 13.6% due to a bigger cultivated area and a boost to yields from above-average monsoon rains, a leading trade body forecast on Friday.

Exports from the world's biggest cotton producer, however, are likely to remain steady at last year's level of 4.2 million bales, the lowest in a decade, as prices in the local market are trading above the global benchmark , the Cotton Association of India (CAI) said.

If India's exports stay at a decade low that could support global prices and help rivals such as the United States and Brazil increase cargoes to key Asian buyers such as Vietnam, Bangladesh and Pakistan.

"We are expecting production growth based on higher acreage and better yields due to good rainfall this year," Atul Ganatra, president of the CAI told Reuters.

The production estimate of 35.5 million bales for the 2019/20 season starting from Oct. 1 could be revised next month as the cotton growing western states of Gujarat and Maharashtra have been seeing rainfall, he said.

India saw its highest monsoon rainfall in 25 years during the June-September season and rains even continued in October and November.

The recent spell of rainfall could damage cotton bolls that are ready for the plucking, said Pradeep Jain, a cotton ginner based at Jalgaon in Maharashtra state.

India's cotton consumption in 2019/20 could edge higher to 31.5 million bales from 31.2 million bales a year ago, the CAI said.

Cotton supplies from the new season have started, but traders have been struggling to sign export contracts as local prices stay above global prices, said Arun Sekhsaria, managing director of exporter D.D. Cotton.

"Indian cotton is nearly 4 cents (per lb) more expensive compared to supplies from other countries," Sekhsaria said.