The world's top cotton industry group has waved the white flag over its huge underestimate of cotton prices after New York futures once again rose the exchange limit, underpinned by US crop revisions.

The International Cotton Advisory Committee admitted that its estimate last week that cotton prices would average 92 cents per pound in 2010-11 implied that values "would have to fall dramatically" for the rest of the crop year, which ends in July.

Its pricing model was being tested by a range of external factors, from America's $600bn economic stimulus to Indian export restrictions, which have been behind the jump in prices to records in both the US, the top cotton exporter, and China, the main producer, consumer and importer of the fibre.

"Fears of defaults on contracts, threats of protectionist interventions in commodity markets by governments, and unprecedented stimulative efforts by monetary authorities are having unpredictable impacts on cotton prices," the committee said.

The ICAC's secretariat said it "wishes to acknowledge that in the current environment of volatility, the price model may be less relevant than in other seasons".

Lowest since 1925

The comments came as New York cotton futures once again rose the maximum allowed by exchange limits, to hit a fresh record of 151.23 cents a pound, reaching an all-time high too on China's Zhengzhou exchange.

New York contracts were pinned against the exchange ceiling by a cut to the estimate for US stocks to 2.2m bales, their lowest since 1925, reflecting both lower production hopes in Texas and higher export expectations.

US stocks were "surprisingly slashed beyond even the lowest estimates", Rabobank analysts said.

Expectations for output in Greece, Pakistan and Turkey were cut too, as well as for the crop in China, where the USDA said that "unusually heavy rain and cloudiness in August and September caused yield and quality losses, slowed cotton maturation, and delayed the start of harvest by one-to-two weeks".

"Serious problems" were noted in some regions, the department added.