Cotton, sugar and rubber prices fell amidst additional speculation that additional preventative steps China might take include selling from its reserves. Copper, zinc and soybeans also decreased in value.
"The recent tightening including the reserve ratio hike this week fueled more expectation that China will accelerate the pace it increases interest rates," Tian Feng, analyst at BOC International (China) Ltd., told Bloomberg from his Shanghai office.
On the Zhengzhou Commodity exchange, cotton for May delivery slipped 7.5 percent. Sugar for September delivery dropped five percent after having reached its historical high this past Tuesday.
On October 19, the People's Bank of China increased its one-year lending rate by 0.25 percent, representing the first increase since 2007. Now at 5.56 percent, that rate might rise again within weeks.
"The government already sold stockpiles of cotton, sugar, aluminum and zinc, and there's speculation that it may do more to suppress prices and contain inflation," Tian told Bloomberg. "There’s also market speculation that the government may sell additional sugar stockpiles, as well as soybean stockpiles."
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