Cotton inventories in China, the world's biggest user, will triple over the next two years to a record as domestic demand slumps to the lowest since 2005, according to the latest estimates from the US Department of Agriculture, a year after record prices spurred farmers to expand their output.

The figures show that global harvests are expected to exceed demand for a third year, swelling stockpiles around the world by 10 percent to 74.67 million, 480-pound bales by August.

Cotton may drop 12 percent in price to 67.87 cents a pound by the end of the year, according to the average of 20 analyst and merchant estimates compiled by Bloomberg.

Slowing economic growth means the surplus will widen even as China, Australia, Brazil and India produce less this season, leading to the first global output decline in three years, the US Department of Agriculture predicted. Prices have already plunged 65 percent from last year's peak of $2.197 a pound.