Cotton imports by China, the largest consumer, will increase this year as government buying absorbs domestic production, according to the China Cotton Textile Association.

“We’ve got a shortfall,” Sun Yingan, deputy president of the association, said in an interview with Bloomberg News today in Beijing. Shipments may gain to as much as 4 million metric tons as state stockpiling has shrunk the amount available on the domestic market, Sun said. The group has more than 700 members whose yarn and cloth account for 60 percent of China’s output, according to its website.

Increased buying by China may help curb a 57 percent tumble in prices over the past year after farmers boosted output to a record. Imports may jump by 54 percent to 18.5 million 480-pound bales (4 million tons) this year, according to a March estimate by the U.S. Department of Agriculture. China may turn to the U.S. and Australia to secure supplies amid an Indian ban on exports, according to Yong An Futures Co.

“Chinese textile companies are experiencing difficulties, but I think some of the previous market estimates on China’s weak cotton mill demand are overstated,” said Sun, who is also chairman of Hubei Xiaomian Industry Group Co. “Textile companies’ demand for cotton won’t fall by a large margin, there will be a shortfall, which will be bridged by both imports and government stockpile sales.”

State Stockpiles

Consumption may fall by 500,000 tons, from about 9 million tons last year, Sun said. Domestic output may have been more than 7 million tons in 2011 and with the government likely to buy 3 million tons that leaves only about 4 million tons of new- crop cotton, Sun said. The government had bought more than 2.8 million tons by March 9 to boost depleted inventories and support domestic prices, according to a statement on the China Cotton Reserves Corp’s website.

“Although the government has a large quantity of cotton stockpiles now, when and how much it will sell remains a question,” Sun said. “The government will weigh imports and stockpile sales later this year. Either way, it will have to satisfy the textile industry’s demand for cotton.”

Imports tumbled 16 percent in January to 326,400 tons from a year earlier, according to Chinese customs data. Output in China will fall 10 percent to 6.4 million tons, Birkenhead, England-based researcher Cotlook said Feb. 16. Consumption will rise 3.4 percent, it said. Global production in 2012-13 will exceed demand by 1.9 million tons, it said.

Prices on March 6 gained to 94.24 cents, the highest level since Feb. 17, after India, the second-largest cotton shipper, suspended exports to secure local supplies. The May-delivery contract dropped 0.9 percent to 88.80 cents on ICE Futures U.S. on March 9. India will keep a ban on exports as a meeting of ministers to review the curbs failed to reach a decision this week.