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UPDATE 1-China to issue extra cotton import quotas as supplies tighten-trade
* China to issue additional cotton import quotas around April
* Beijing stockpiled 93 percent of 2012 domestic cotton harvest
* Domestic cotton stockpiling to finish by end-March (adds more details)
BEIJING, March 15 (Reuters) - China, the world's top consumer of cotton, will issue extra cotton import quotas to textile mills by around April after purchases for the government's stockpile cut domestic supplies, trade sources said on Friday.
The market expects Beijing to allocate as much as 800,000 tonnes of import quotas, most of which will be issued to textile mills that export their products, traders said. That will add to 894,000 tonnes of low-tariff quotas issued earlier this year.
"Cotton supplies are getting tight and these mills need quotas to start purchases," said one trader with an international trading house.
Active purchases by China, the largest importer, will support New York cotton prices, which hit their highest in nearly a year on Thursday, supported by merchant and speculator buying.
Beijing normally does not announce the amount of extra import quotas issued. Mills will have to pay a tariff on any imports, which is set at 5-40 percent depending on international prices.
Mills that export their products would win about 600,000 tonnes of the new quotas, a second trader with a major international trading house said.
The Chinese government has been stockpiling cotton after offering a floor price to support farmers, amassing about 10 million tonnes or 60 percent of world stocks. The 7-month scheme will finish at the end of March.
By Thursday, the government had purchased 6.37 million tonnes of cotton from the 2012 harvest, accounting for 93 percent of the 6.84 million tonnes harvest.
China's textile industry, the world's largest, has blamed the stockpiling policy for pushing domestic cotton prices <0#CCF:> well above global prices and has been urging Beijing to issue more quotas for cheap overseas supplies.
Analysts expect the government will also step up state sales from April and estimate that 3 million to 4 million tonnes of state cotton will be sold to the domestic market in coming months.
Chinese textile mills consume an average of about 700,000 tonnes of cotton a month. (Reporting by Coco Li, Niu Shuping and Fayen Wong; Editing by Richard Pullin)
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