An Indian textile mills federation is demanding an immediate ban on cotton exports as weak production in the country is leading to a "grave situation" for industry supplies.

The Southern India Mill Association said a delayed monsoon and heavy floods in many cotton growing areas may lead to a 10% lower output in the world's second largest producer of cotton.

Although the annual requirement of the Indian industry is only 24m bales (170 kg each) against the expected production of 26m bales, much of the 15m bales of the good quality cotton gets exported to China, Indonesia, Thailand and Bangladesh, while the local industry has to use the leftovers or buy costly imports.

In neighbouring Pakistan too, the government is considering banning cotton exports as the crop has been reduced by a virus - cutting production 25% to 30%: it is now expected to be only 12m bales.

The move is, however, fiercely opposed by local farmers.