DJ MARKET TALK Cotton: Falls As China Raises Interest Rates

Cotton futures dropped Tuesday as traders cut risk following China's announcement it would try to slow its economic growth. The central bank said it plans to increase interest rates to rein in domestic demand and inflation, a move traders worried would cut into heavy cotton buying by Chinese mills. Demand in China has largely driven the historic rise in cotton prices, ICAP Futures says, and now some funds are cautiously liquidating their positions. ICE November cotton settled 3.11 cents, or 2.7%, lower at $1.1026 a pound.