March 18 (Bloomberg) -- China, the world’s biggest cotton importer, may increase purchases of the fiber 30 percent this year and drive up global prices as growers plant a smaller crop, a state-affiliated researcher said.

Imports may be more than 2 million metric tons from 1.53 million tons last year, Mao Shuchun, cotton researcher at the Chinese Academy of Agricultural Sciences, said in a telephone interview from central Henan province.

Domestic cotton farmers, hurt by volatile prices, switched to more profitable crops, including grain and vegetables, Mao said. Increased imports, which account for about 30 percent of global trade, may help extend a rally in New York cotton prices, which have doubled in the past year.

“For sure this year imports will increase,” Mao said yesterday. Increased buying may help lift the price of U.S. cotton to about 90 cents a pound on the cash market, he said.

Planting of cotton in China this year may fall 4.9 percent from last year’s 74.25 million mu (5 million hectares), “so it’ll probably fall below 70 million mu,” Mao said. “I don’t think boosting planting is possible. The best scenario is we may see the same area being kept.”

Cotton for May delivery gained 0.3 percent to 81.37 cents a pound on ICE Futures U.S. The price has fallen 3.8 percent since reaching a two-year high of 84.6 cents on March 1.

‘Tight Supply’

“Cotton supply in inland provinces, outside main producer Xinjiang, is extremely tight,” said Dong Shuzhi, an analyst at Jinshi Futures Co. in Henan. “We think the government will issue another million tons of import quotas” on top of the 1.89 million tons already allotted. China controls its cotton imports by issuing permits to qualified users.

China’s plan to boost commodity stockpiles will also reduce the amount of commercial supplies, forcing mills to seek imports, Mao said. Supply from the U.S., the biggest exporter, “won’t be abundant” because of its policies to boost corn-based ethanol. That in turn is forcing other cotton-growing countries to plant more grain instead of fiber crops, he said.

China is forecast to buy 2.1 million tons this year, out of 7.5 million tons exported worldwide, according to the USDA.

The National Development and Reform Commission, the top planning body, said in a document to the National People’s Congress on March 5 that it wants cotton output to increase to 6.7 million tons this year from 6.4 million in 2009.

Farmers throughout China have reduced cotton acreage and boosted grain planting since 2004, when the government started price-support policies for wheat and rice and stockpiling of corn, Mao said. The policies favoring grain gave farmers more assurance than the volatile cotton prices, he said.

In 2008, when cotton prices plunged amid the financial crisis, many farmers lost money, Mao said. Even as prices recovered last year, farmers on average made only 500 yuan ($73) per mu, Mao said. Growing fruit or vegetables can generate 10 times more revenue than cotton, Mao said.

“The fruit trees have already been planted, so you’d have to cut them down” if cotton acreage is to be expanded, he said.