Cotton production will exceed demand by 1.2 million metric tons in the 2011-12 season that starts Aug. 1, making up for about a third of the shortage in supplies for the past two years, industry researcher Cotlook Ltd. said.

Global output will jump 13 percent to a record 27.65 million tons as demand climbs 4.4 percent to an all-time high of 26.4 million tons, Birkenhead, England-based Cotlook said today in its first estimates for the new season. Shortages the past two years reduced stockpiles by 3.5 million tons, Cotlook said, pushing prices to a record high.

“The world stockpile situation isn’t going to turn around overnight,” said Matt Robinson, a Cotlook director. “It would still be a reasonable assumption that we would see some reduction in prices.”

Cotton prices jumped to a record $2.0193 a pound in New York today as textile mills from Indonesia to Turkey bought back futures to fix a price against the March futures contract which has a first notice on Feb. 22, Robinson said.

In China, the world’s biggest producer and consumer of the fiber, production will increase 15 percent to 7.1 million tons, below demand of 10.5 million tons, Cotlook said. In the U.S., production will expand 5.4 percent to 4.2 million tons, according to the company. U.S. demand will be 827,000 tons, up 4.9 percent, it said.