Cotton hit a fresh 15-year high in style – with buying so strong that New York futures spent most of the day at the maximum allowed by New York's Ice exchange, and options trading shut down early after showing even bigger gains.

Cotton futures for December, the benchmark contract, had traded up the 4.00-cents-a-pound maximum allowed by the exchange as of noon New York time to reach 114.87 cents a pound, and stayed there the rest of the trading day.

That was their highest level since July 1995.

Meanwhile, Ice Futures US closed options trading at soon at 1pm local time, after going up twice the daily futures limit, to reach 118.87 cents a pound, which required dealing to be ceased under exchange rules.

Futures prices at that level would beat the record of 117.20 cents a pound hit in April 1995.

'Extremely healthy import margins'

The performance followed a further downgrade to China's cotton crop, which prompted prices on the local Zhengzhou Commodity Exchange also to hit limit up, at the equivalent of more than $3,670 a tonne, or about 170 cents a pound.

The China Cotton Association cut by 60,000 tonnes to 6.64m tonnes its forecast for the Chinese crop, the world's biggest, the second estimate cut in less than three weeks.

The price soaring price of cotton in China indicated that further rises in New York prices may be in store, as mills turn to cheaper supplies from the US, the top exporter, a London analyst told Agrimoney.com.

"There are extremely healthy import margins for Chinese mills, helping keep record exports coming out of the US," the analyst said.

"As long as mills' margins are still there, they are going to buy [US cotton]."

Speculation fears

Concerns that India may further delay its return to cotton exports, and the prospect of flood-hit Pakistan raising its export needs, are also supporting prices, the analyst added.

However, Chinese authorities have questioned whether fundamentals alone can explain the jump in prices, which for the Zhengzhou's May contract have jumped by 25% in a month.

China's National Development and Reform Commission has held a meeting with other government departments in an effort to curb speculation, the China Cotton Association said.

The government would "monitor certain enterprises to check any behaviour that is against regulations", and use unspecified "other measures" to adjust prices, the association said.

China's clampdown comes as France is leading the G20 group of nations and the European Union on drives to curb commodities speculation.