* China 2013 cotton acreage may fall to its lowest in decade
* Beijing to continue stockpiling 2013 cotton harvest
* Government to increase state sales from April
BEIJING, March 27 (Reuters) - China, the world's top cotton consumer, will increase sales from state reserves of the fibre from April, in a bid to boost dwindling domestic supply, a government official said in a speech published on Wednesday.
To help meet demand from textile mills, Beijing will step up sales from its bulging reserves, particularly of high-quality cotton, beginning in April, Li Yan of the country's top economic planner, the National Development and Reform Commission, told a meeting on Tuesday, but gave no further details.
Cotton supplies have been under pressure as a result of China's controversial state stockpiling policy, which has seen the government buy nearly 10 million tonnes, or about 60 percent of global cotton stocks, since 2011.
Plans for sales by China and India, the world's largest producers of cotton, put New York prices under pressure last week. A four-day slide in prices ended on Tuesday, as reports of new import quotas in China helped buoy the market.
The domestic supply squeeze could worsen this year with China's cotton acreage expected to fall to its lowest in a decade, Gao Fang, an official of the China Cotton Association, said in a speech posted on its website (www.china-cotton.org).
Chinese farmers are likely to grow 6.8 percent less cotton this year, with the sowing area expected to fall below 4.67 million hectares, its lowest since 2002, Gao said.
The figures are in line with a survey published recently by the influential China Cotton Research Institute, which attributed the decline to the lower returns to cotton farmers, compared with those from planting grain.
Beijing's stockpiling has kept domestic cotton prices as much as 40 percent higher than global prices, but Li of the NDRC said the government had no intention of changing the policy for the 2013 harvest, and would not set any limits on volumes.
The government purchase price is expected to remain at last year's level of 20,400 yuan ($3,300) per tonne for the 2013/14 harvest. The price, aimed at boosting local farmers' incomes, is well above current global cotton prices.
In New York, the most-active May cotton contract on ICE Futures U.S. gained 1.45 cent, or 1.7 percent, to settle at 88.04 cents per pound on Tuesday, in fibre's largest one-day rally since a 1-year high of 93.93 cents a pound on March 15. ($1=6.2107 yuan)
