Cotton tumbled for the third straight session after China raised interest rates, signaling commodity demand may ease.

The People’s Bank of China boosted one-year lending and deposit rates by 25 basis points on Dec. 25 to counter accelerating inflation. Cotton futures dropped 8.4 percent in three sessions. On Dec. 21, the price reached a record $1.5912 a pound.

“China trying to control inflation is adding further pressure,” said Sharon Johnson, a senior analyst at Penson Futures in Atlanta.

Cotton for March delivery slumped 2.36 cents, or 1.6 percent, to settle at $1.4576 at 2:37 p.m. on ICE Futures U.S. in New York. Earlier, the price fell 6 cents, the exchange limit. U.S. markets were closed on Dec. 24.

Prices have surged 93 percent this year as global supplies trailed demand from China, the world’s biggest user.

China imported 126,125 metric tons last month, according to the country’s customs agency. That compares with 154,547 tons a year earlier and 96,096 in October.

Prices also fell on speculation that a merchant may have had to liquidate part of its position because of “cash problems,” Johnson said. Intercontinental Exchange Inc., which owns ICE Futures, declined to comment.