Efforts by the Chinese government to build the country's cotton stockpiles have led to "significant uncertainty" that could weigh on the global cotton market for years, an inter-governmental group has warned.

The International Cotton Advisory Council (ICAC) estimates China's cotton imports will be 4.2m tons during the season that ends on 31 July, a rise of 61% on the previous year.

It also says China accumulated over 3m tons of domestic cotton and at least 1m tons of foreign cotton in its national reserve during the first eight months of 2011/12.

"While the purchases supported both domestic and international prices so far, sales from the reserve could reduce Chinese imports and depress world cotton prices in the future," the group said.

Government policies in India are also seen as having a potential impact on cotton prices, after a ban on new exports was introduced on 5 March.

While the impact of this ban had a limited effect on international cotton prices in March - with the Cotlook A Index remaining around $1.00 per pound - the longer the ban remains in place, the greater its upward impact on world cotton prices is likely to be.

Overall, global cotton trade is expected to rise by 9% to 8.4m tons in the 2011/12 season, driven by near record imports from China.

But with global production exceeding consumption, stocks are expected to rebound by 41% to 13.1m tons. However, two-thirds of the increase in global stocks has taken place in China, as a result of the stockpiling policy.

"If we subtract the expected amount in the China national reserve from global stocks, the remaining 'free' stocks may increase by only 5% to 9.4m tons this season," the ICAC said.

"The size of the Chinese national reserve creates significant uncertainty for the global cotton market for months and maybe years to come."

The rebuilding of the Chinese national reserve was introduced to ensure domestic cotton supplies and help avoid future fluctuations in cotton prices. The scheme began in September and has run for seven months to the end of March.

However, the China Cotton Association says the rising cost of labour and cotton seeds, coupled with falling cotton prices, mean farmers are now delaying their sowing and that plantings are down by as much as 20% in some areas.