The cotton shortfall in China between 2005 and 2006 is estimated to be around 3.2 million tons, the China Securities News reported Thursday.

Shi Jianwei, executive vice chairman of the China Cotton Association, ascribed the shortfall to the decline in China's cotton acreage at the 2005 China International Cotton Conference held in Shanghai.

Given that the aggregated area of China's cotton fields decreased 10 percent over the 2004-2005 period, the country's cotton output is projected to be around 5.76 million tons. In the meantime, the country's market demand for cotton will grow to around 8.85 million tons as the output of yarn is expected to increase by one million tons.

Shi said the shortfall will also be impacted by climate changes, cotton imports, the development of textile trade disputes, exchange rates, interest rates and the macro regulative policies of the Chinese government.

A previous report from the Department of Agriculture of the United States predicted that China's cotton output for 2005 and 2006 will be 5.552 million tons while its total domestic consumption will reach 8.927 million tons.

With a stockpile of 1.58 million tons, China would import approximately 3.266 million tons of cotton this year, said the report.