China Grain Reserves Group Ltd, known as Sinograin, sees the country's cotton output totalling 5.95 million tonnes in 2020/21, the official Xinhua news agency said on Wednesday.

The number is slightly higher than a 5.91 million tonnes forecast for the September-August crop year from China's agriculture ministry earlier this month and up from an estimated 5.8 million tonnes in 2019/20.

With China's total cotton demand in 2020/21 set to reach 7.8 million tonnes, there will be an annual supply deficit of about 1.85 million tonnes, Xinhua said on social media platform Weibo, citing Sinograin.

Top cotton consumer China has "expanded its import channels and strengthened cooperation with important cotton-producing countries such as Brazil and India to ensure stability of the domestic cotton supply chain," it added.

Cotton from Xinjiang, which has been banned by the United States amid allegations of forced labour denied by Beijing, is seen at 5.2 million tonnes in 2020/21, accounting for 87% of China's total production, Xinhua added.