The cotton purchasing and reserve program will begin on 1 September, and will run for seven months until the end of March.

The government has committed to buy standard cotton at CNY19,800 (US$3,027) per ton - around 30% below current futures prices - in 13 cotton producing areas in China.

It will step in to make its purchases if market prices fall below this state purchase price for five working days. Purchases will be conducted by the National Cotton Reserves Corporation.

The plan has been devised by the National Development and Reform Commission, a top economic planning body, according to the state-run Xinhua news agency.

The agency says that while the country has carried out cotton purchase and reserve programs in the past, this is the first time it has announced a purchase price before the initiative gets underway.

Chinese farmers are currently preparing to begin this year's cotton planting, but a recent survey by the Ministry of Agriculture showed the growth in acreage is likely to be just 5.4% higher than last year.

The country is the world's top cotton producer, consumer and importer.