BEIJING, March 4 - China's cotton imports this year may fall because of high international prices and dwindling global supply, according to a research institute report published on Friday.

Cotton imports in 2011 are likely to be between 2.5 million and 2.845 million tonnes, flat or lower compared with last year's 2.84 milion tonnes, said the cotton research institute under The Chinese Academy of Agricultural Sciences, in a report published on website of the China Cotton Association.

The supply shortage and high prices would also damp cotton textile output this year, making it flat or lower than last year, said the report.

Cotton-growing areas in China would likely expand this year, prompted by high prices, but the increase would be less than 10 percent as the crop is more labour-, time- and money-intensive than other crops, it said.

Domestic cotton prices were more likely to fall this year because of the government's liquidity-tightening moves, said the institute, adding that new cotton prices were expected at between 24,000 and 26,000 yuan per tonne, lower than the average of between 27,953-29,603 yuan per tonne during the first two months of the year.

Many cotton mills in China are expected to close this year because of severe competition caused by supply shortage, high prices, and credit tightening, said the institute.

Cotton yarn output in 2010 was 27.17 million tonnes, up 13.5 percent on year, it said.

source:Reuters