The cotton shortage this season will be 24 percent smaller than forecast last month because of slowing demand, led by China, the world's largest buyer and producer of the textile material, Cotlook Ltd. said.

Production will lag behind demand by 414,000 metric tons in the season that ends July 31, down from last month's estimate of 548,000 tons, Birkenhead, England-based Cotlook said in a report today. China's demand forecast was lowered by 188,000 tons to 9.8 million tons, the company said.

''Statistics confirm recent anecdotal reports of slowing mill consumption of raw cotton on various markets,'' Cotlook said in the report.

Cotton prices in New York have almost doubled in the past year because of the global shortage.

Cotton output will exceed demand by 1.25 million tons in the season starting Aug. 1, 11 percent more than last month's estimate, Cotlook said. Production will be almost 27.6 million tons, 59,000 tons higher than the March forecast and up 14 percent from this season, according to the report.

''A significant recovery in world supply remains in prospect during 2011-12,'' Cotlook said