China is stowing away an unprecedented amount of cotton in effort to aid farmers as global production exceeds demand for the fourth year in a row, risking tipping prices into a bear market as supply could suddenly surge.

It is expected that by July of next year, China will hold 12.7 million metric tons in inventory, equalling 62 percent of the global total, or enough to make 71 billion t-shirts, according to estimates by the U.S. Department of agriculture. Should the Chinese government decide to end its stockpiling programme the following season, as anticipated, cotton prices will fall 8.5 percent a pound in a year.

U.S. and Brazilian growers trimmed production in 2011 as prices dropped from a record $2.197, but farmers in China increased theirs as the state absorbed excess output. The government bought supply equal to 85 percent of domestic production last year and will import 2 million tons less this season. Cheaper cotton prices have already boosted margins for the Levi Strauss & Co., Hanesbrands Inc. (HBI) and other clothing companies.

Cotton slumped 18.6 percent to 75.95 cents a pound yesterday on ICE Futures U.S. in New York since hitting a 16-month closing high of 93.32 cents on 16th August, approaching the 2 percentage limit of a bear market. That trimmed this year’s advance to 1.1 percent as the Standard & Poor’s GSCI gauge of 24 commodities fell 5.6 percent. The MSCI All-Country World Index of equities increased 17 percent and the Bloomberg U.S. Treasury Bond Index lost 2.1 percent.