Sept. 17 (Bloomberg) -- Cotton futures extended a rally to the highest price in more than 15 years as demand from textile mills expands amid declining global inventories.

December-delivery cotton advanced as much as 1 percent to 96.75 cents a pound, the highest price since June 1995, on ICE Futures U.S. in New York. The contract traded at 96.56 cents at 10:36 a.m. Singapore time. Cotton has surged 50 percent in the past 12 months.

Total net export sales of upland and American Pima cotton from the U.S., the world’s largest shipper, soared more than fivefold to 844,218 bales in the week to Sept. 9, from a week earlier, the U.S. Department of Agriculture said yesterday.

“Exceptional U.S. cotton export sales in the latest week were a very bullish factor,” Commonwealth Bank of Australia said in a report e-mailed today. “It was expected that the current high prices may have tempered physical demand, but this is yet to be the case.”

Global stockpiles will decline to 45.4 million bales in the year ending July 31, the lowest level in 14 years, according to USDA data on Sept. 10.

The contract has gained 5.8 percent this week, the biggest weekly advance since February.