Feb 2 (Reuters) - India has asked traders to apply for cotton yarn exports for unshipped quantities out of the 720 million kg allowed in the 2010/11 season, a government circular said late on Tuesday.

Cotton yarn

Exporters must apply between Feb. 2 and Feb. 7, the circular said, and after getting permission have to export the quantity by March 31.

The circular did not specify how much quantity out of 720 million kg has been shipped and how much remained, but trade sources said about 670 million kg has been shipped.

Overseas demand for Indian cotton has increased after bad weather hit crops in China and Pakistan, both leading consumers.

India is likely to produce a record 32.9 million bales of cotton in 2010/11, topping last year's 29.5 million bales, a senior government official said last week.

(Reporting by Rajendra Jadhav; Editing by Sunil Nair)