China, the biggest cotton importer, may buy 20 million bales this year to meet rising demand from the domestic textile industry, sustaining price gains, Olam International Ltd. said. The amount would be a record.

The Asian nation purchased 10.9 million bales in the year ended July 31, according to the U.S. Department of Agriculture, which estimated on Nov. 9 that China’s imports will rise to 15 million bales. The country imported a record 19.3 million bales in the year ended July 2006, according to USDA data.

“The priority for the Chinese government is food-crop production is maximized and not so much fiber,” Olam Chief Executive Officer Sunny Verghese said in a Bloomberg Television interview today. “China will continue to rely on significant imports to meet its cotton requirements.”

Cotton futures in New York and Zhengzhou surged to records this month on concern that domestic shortages in China may prompt the nation to boost imports. Cotton on ICE Futures U.S. has climbed 70 percent this year.

China’s purchases are the reason “we feel prices will hold up at very high levels,” Wayne Gordon, a senior analyst at Rabobank Groep NV, said by phone from Sydney today. “Given that it has run down its strategic stocks, it will be in the market trying to top up reserves”

Production in China is forecast by the USDA to trail domestic demand for the 12th straight year, pushing the nation’s stockpiles to the lowest level since 1995.

China grows about 30 million bales a year and demand is about 50 million bales, said Verghese of Olam, one of the world’s three biggest cotton suppliers. “It has to import 20 million bales,” he said.

Verghese’s production estimate for China matches the USDA’s forecast, while the agency projected the Asian nation’s demand will be 47 million bales. Each bale weighs about 480 pounds.