China is to sell more cotton from government stockpiles to try to satisfy rising domestic demand for the fibre and offset rising domestic prices.

According to a notice from the China Cotton Association, the government has approved a plan to release 400,000 tons of cotton from state stockpiles. The move follows a similar decision in June, when an extra 600,000 tons of cotton were made available.

Cotton prices have surged through a combination of rising demand from textile companies whose orders are growing as retailers and brands recover from the recession, as well as  lower domestic production of the crop.

The US Department of Agriculture has already calculated China’s cotton consumption is estimated at 10.34m tons in the 2009-2010 season, while production is likely to be just 7.1m tons.