Cotton futures continued their rally on the back of demand from Chinese textile mills, and as the China Federation of Logistics and Purchasing warned that the country’s textile market has “a shortage of raw material,” Bloomberg reported. Cotton for December delivery rose 0.9% to US$1.3552 a pound in New York, off a high of US$1.392, the highest level in 140 years of trading. Prices are up 79% so far this year. Cotton futures in Zhengzhou closed at record levels for the third day in a row Wednesday. China uses 40% of the world’s cotton output, but the US Department of Agriculture estimates that production at Chinese mills will fall for a third straight year in 2011 as demand for raw materials continues to outpace supply. The domestic cotton harvest was expected to be 18.5 million bales short of demand this year. Meanwhile, China’s cotton imports were forecast to hit 13 million bales this year, up from 10.9 million bales in 2009.