A surge in cotton imports into China is set to boost global cotton trade this season, and is also likely to keep cotton prices low, according to the latest forecast from an inter-governmental group.

The International Cotton Advisory Council (ICAC) estimates world cotton shipments will rise by 13% to 8.6m tons in the 2011/12 season - which runs until 31 July - driven by record imports from China.

While China will account for 52% of global imports this season, imports by the rest of the world are projected to fall by 18% to 4.2m tons as efforts to build China's cotton stockpiles mean there is less cotton available for other countries.

US exports are dropping by 21% to 2.5m tons due to reduced supplies, the ICAC says, but shipments from India, Brazil and Australia could reach record levels.

As a result, while stocks in China are expected to more than double to 5m tons in 2011/12, stocks in the rest of the world will increase at a more moderate rate of 14% to 8.1m tons.

The forecast comes as cotton plantings get underway in the northern hemisphere for the 2012/13, which runs from 1 August to 31 July 2013.

World cotton area is expected to fall by 7% to 33.6m hectares in response to lower prices, rising agricultural production costs and the improving attractiveness of alternative crops like grains and soybeans.

Based on average yields, world production could decline by 7% to 25.2m tons, ICAC says. The decline in production will be driven by China, expected to produce a crop of 6.4m tons or 13% lower than in 2011/12.

Production is also expected to decline in India, Pakistan, Brazil and Turkey. But US production could rise by 11% to 3.8m tons despite reduced plantings, assuming improved weather and lower abandonment than in 2011/12.

After two seasons of decline, global cotton mill use is projected to increase by 4% to 24.1m tons in 2012/13, driven by improving economic growth and lower cotton prices. With global production exceeding global consumption again, global stocks are expected to continue increasing by 9% to 14.3m tons, or 59% of world mill use.

The projected accumulation of cotton stocks will weigh on international cotton prices in 2012/13 - but the extent of this downward pressure will largely depend on how the Chinese national reserve is handled.