Cotton futures extended a rally to a 15-year high on escalating concern that global supplies will trail demand.

China, the world’s biggest grower and consumer, plans to auction an additional 400,000 metic tons from reserves to meet demand from the textile industry. The nation’s output may fall “slightly” this year, the National Development and Reform Commission said yesterday. Inventories monitored by ICE Futures U.S. are close to the lowest level since at least 2002.

“For months, we’ve been talking about tight stocks,” said Keith Brown, the president of Keith Brown & Co., a brokerage in Moultrie, Georgia. “The market has an upside destiny, and it’s just going to go there.”

Cotton for December delivery rose 1.31 cents, or 1.3 percent, to settle at $1.0524 a pound at 2:49 p.m. on ICE in New York. Earlier, the price reached $1.064, the highest level for a most-active contract since June 1995. The fiber has jumped 67 percent in the past 12 months.

The China Cotton Association said yesterday that domestic use exceeded output by 3.6 million tons in the year ended Aug. 31, wider than the year-earlier deficit of 2.6 million,

“Cotton prices have been driven higher by rising Chinese imports,” Deutsche Bank said today in a report. The U.S. is the biggest exporter.

India, the second-biggest grower, will allow exports starting Nov. 1, Rita Menon, the secretary in the ministry of textiles, said today. Suppliers can register shipments starting Oct. 1 Menon said, reiterating earlier government decisions.

Crop conditions in the U.S. deteriorated in the week ended Sept. 26 with 55 percent of cotton rated in good or excellent condition, down from 58 percent a week earlier, the government said yesterday.