(Reuters) - India's cotton imports could jump by two-thirds to over 2 million bales in 2012/13, a top industry official said, as a seasonal output slowdown and stockbuilding push domestic prices higher in the world's second-largest producer.

India exported cotton in the first part of the year to Sept. 30, as demand was amply covered by production, but it will turn to imports towards the end of the harvest period as supplies start to wane and domestic prices rise.

"Cotton imports may exceed the target of 2 million bales in 2012/13," D.K. Nair, secretary-general of the Confederation of Indian Textile Industry (CITI), told Reuters on Friday.

Textile Commissioner A.B. Joshi, the top government official for the industry, said in January that cotton imports could total 2 million bales this year. Last year, India imported 1.2 million bales.

Currently cotton supplies to spot markets across the country are around 100,000 bales per day, down from 200,000 bales per day at the start of February, according to traders.

The government has bought 2.5 million bales of the crop, which is expected to reach about 33 million bales for 2012/13, down from a record 35.5 million bales a year earlier.

It has allowed 8 million bales of exports for the year to Sept. 30, 2013, of which trader expected around 6 million bales to have been already been shipped.

New Delhi controls supply in order to protect its domestic industry, which uses about 26-27 million bales a year.

PRICE RISE

Now, dwindling domestic supplies and stockbuilding have pushed local prices higher, hurting mills which struggle to pass cost increases on in a country where nearly half the 1.2 billion population live on less than $1.25 per day.

"Mills cannot afford higher prices because they may not be in a position to pass it on to their customers. So there are chances that they might import," Nair added.

The March cotton futures contract on the Mumbai-based Multi Commodity Exchange (MCX) has risen more than 9 percent since the beginning of February to Friday's close at 18,660 rupees ($340) per bale of 170 kg.

India usually imports raw cotton mainly from the United States, Brazil, Pakistan, Egypt and other African countries

"This is not the first time we (India) are importing cotton from Africa, this happens every year. Import enquiries increase after March as the Indian supply season draws to a close," said Dhiren N. Sheth, president of the Cotton Association of India.

He added imports could rise from West and East Africa.

The Cotton Textiles Export Promotion Council (TEXPROCIL) and CITI has asked the government to release stocks, hoping to cool prices.

"Around 20,000 tonnes of raw cotton have been contracted from Africa during the last 30 days. Indian prices always used to remain lower than international prices but this time they are 5-7 percent higher," said Manikam Ramaswami, TEXPROCIL chairman.

Indian buyers are importing cotton in the range of 90-95 cents per pound from Africa, he said.

Current price gains in domestic markets are likely to crimp further exports and could prompt private traders to release their stocks, said Nair. There have also been rumours in U.S. markets that India might introduce an export ban.

Besides the state-run Cotton Corporation of India, the National Agricultural Cooperative Marketing Federation (NAFED) has been told to procure supplies in several states, he said.

India is expected to produce 33 million bales in 2012/13 according to the latest forecast from the state-run Cotton Advisory Board. Consumption is seen around 26-27 million bales. (Reporting by Meenakshi Sharma; Editing by Jo Winterbottom and Sophie Hares)