Cotton closed limit up in New York after India, the world's second-ranked exporter, barred cotton shipments in an effort to curb soaring domestic prices.

India's government said it had, as of Monday, stopped registering fresh cotton contracts for export.

News of the ban sent New York cotton for May delivery up 3.0 cents, the maximum allowed by the exchange, to close at 82.85 cents a pound.

"News that India [has stopped] its exports of cotton seems to have helped sentiment," Sucden Financial said.

The US is the world's top cotton exporter.

Two-way pull 

The strength demand for cotton has been one of the surprises of recent months to commodity investors, many of whom had expected consumption to remain undermined by soft global economic growth.

Demand for cotton in India, whose domestic industry is growing by some 5-6% a year, has been particularly strong, driving prices up some 50% over the last year despite the country bucking the global trend and raising production.

The government's Cotton Advisory Board said earlier this month that strong orders from Bangladesh and China may double to some 8m bales India's cotton exports for the year to September.

A US report on Monday reported that the rapid growth in Indian cotton production may tail off as it reaches the end of a period of expansion fostered by the introduction of genetically modified varieties.