The International Cotton Advisory Committee kept its forecast of a rich pipeline of the fibre on its way, with world production set to rise by 8.8% to a record high of 27.3m tonnes (125m bales) in 2011-12.
Growers in Australia and Brazil, both major exporters, are "expanding production substantially", responding to prices which, in New York, hit a record 159.12 cents per pound last month.
However, such output will not begin to become available until April, leaving buyers to compete for now for the mere 830,000 tonnes of 2010-11 export supplies left uncommitted.
"It is estimated that only about 10% of projected world trade of 8.3m tones is still available for purchase at this relatively early stage of the season," the committee, an influential intergovernmental group, said.
The tightness of the supply squeeze had been exacerbated by the cap on shipments from India, the second-ranked exporter, of 1m tones, all of which had been committed.
However, it had been reflected in demand from the US, the top exporter, of which 90% of projected shipments were committed, with the figure 85% from Central Asia, a region which includes Uzbekistan, the third-ranked exporter.
"The scarce uncommitted supply may provide strong pressure on prices and cause increased volatility through the rest of the season," the ICAC said, lifting to 101 cents a pound, from 95 cents a pound, its forecast for average 2010-11 prices as measured by the Cotlook A index.
The report made minimal changes to estimates for world cotton supply and demand either this season or next despite concerns among many analysts that high prices may choke consumption for the fibre, while the floods in Queensland are expected to dent the rise in Australian output.
The state is responsible for more than one-third of Australian cotton sowings, with the balance in New South Wales.
"The near-term supply situation has taken has taken a turn for the worse over the past two weeks due to the devastating floods which are flowing through the heart of Queensland cotton regions," Luke Mathews, at Commonwealth Bank of Australia, said.
"In many areas the flooding is the worst on record," he added, while saying that it was too early yet to quantify damage, "with flooding expected to worsen in some areas over the next 24-48 hours".
PrimeAg, the Australian farming group, on Tuesday cut its profit forecast, warning that 13% of its 15,200 hectares of cotton crop had been flooded, and would be lost if waters failed to subside within the next three days.
New York’s March cotton contract stood 0.9% lower at 140.95 cents a pound at 10:00 GMT.