Cotton prices have risen to a record as mills face extremely low supplies.

ICE March cotton, the US benchmark, rose by the 5 cent daily allowable limit to $1.6194 per pound on Monday, the highest in the 141-year history of the New York exchange and its predecessors.

The fibre has gained 131 per cent in the past year as mill demand bounced back from the global financial crisis and India, the world’s second-largest exporter, restricted shipments to help its domestic textile industry.

The latest price rise comes as stocks available for delivery are extraordinarily low. Certified ICE warehouse stocks are 125,520 bales, less than 1 per cent of the number of contracts for delivery before the US harvest.

Jordan Lea, president of the American Cotton Shippers’ Association, estimated that 90 per cent of last year’s crop and stocks in the US, the largest exporter, had already been sold.

New cotton from the southern hemisphere would not become available until April, said Terry Townsend, executive director of the International Cotton Advisory Committee.

“Until then, you can’t create cotton out of air,” Mr Townsend said.

Australia, the largest southern hemisphere exporter, is expected to more than double production in spite of recent floods.

The ICAC, an intergovernmental group in Washington, will next month gather diplomats and other officials to discuss recent volatility and “encourage transparency and predictability in government policies and programmes” affecting cotton, it said.

Demand has meanwhile been strong. China’s cotton imports last year rose 86 per cent to 2.84m tonnes, its customs administration said last week.

Christian Schindler, director-general of the International Textile Manufacturers Federation, said mills had been buying cotton in small lots, sometimes on a daily basis, to avoid being stuck with expensive inventory in the event that prices fell.

“Everyone is afraid of volatility,” he said.

Higher prices could spur US farmers to plant more cotton this spring, but surging markets for corn, soyabeans and wheat could limit gains in land area, analysts say.