Cotton prices soared to a nominal record high on Friday amid heavy buying in China, the world's largest importer, and disappointing crops in major producing nations including Pakistan.

The rise in the price of cotton will reverberate through the textile industry, forcing clothing companies to either pass the increase on to the consumer or face lower margins. While the impact is likely to be muted on high-priced clothes, it could be more noticeable in cheaper items such as t-shirts and underwear.

Clothing companies including UK-based Next and jeans maker Levi Strauss & Co have already announced price hikes due to rising cotton costs.

In New York, ICE December cotton futures surged to a record high of 119.80 cents per pound, surpassing the previous record set in 1995. Later, cotton traded up 3.13 cents to 118 cents per