New York/Chicago: Global cotton production may be higher than forecast last month as output gains in India, boosting world stockpiles, the US department of agriculture (USDA) said. Prices in New York fell.

World output is seen at 118.02 million bales, more than the 117.16 million estimated in June, the USDA said in a report on Thursday. Production in India, the biggest grower after China, will total 28 million, 3.7% higher than forecast last month. Global stockpiles may be 94.34 million, up 10% from a revised 85.58 million the previous year.

Cotton futures climbed 13% this year in New York on signs of rising demand and as a drought hampered crops in the US, the world’s biggest exporter. World consumption will be 109.79 million bales, less than the 110.17 million forecast a month ago and more than a revised 107.38 million a year earlier.

“There is no upside for cotton without a weather event, especially with the increase in world output," Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “There will have to be a lot more drought-like weather in Texas to see anything bullish again."

Cotton for December delivery fell 2.4% to close at 84.74 cents a pound on ICE Futures US in New York, the biggest drop since 1 May.

US crop

USDA kept its forecast for the 2013 domestic cotton crop unchanged at 13.5 million bales. On average, analysts and traders expected US output to gain to 13.75 million, a Bloomberg survey showed. A year earlier, the crop totalled 17.32 million bales.

US exports may be 11 million bales in the 12 months that start 1 August, down from 13.3 million in the current season, the government said. Unsold supplies may total 2.9 million, more than the 2.6 million projected a month ago, and less than 3.9 million a year earlier. A bale weighs 480 pounds, or 218kg.

US yields are projected at 831 pounds per acre, more than the 800 pounds projected in June, and down from 887 pounds in the year ending 31 July.