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Cotton falls to 3-1/2-year low as Sino-U.S. trade worries escalate

Aug 5 (Reuters) - ICE cotton futures slid more than 3% on Monday to their lowest in nearly three-and-a-half years on fears that escalating trade tensions between the United States and China will worsen demand for the natural fiber.

* The most-active cotton contract on ICE Futures U.S., the

second-month December contract , fell 1.93 cent, or

3.25 %, at 57.49 cents per lb as of 08:11 a.m. EDT (1213 GMT).

* The contract touched its lowest since March 2016 at 57.26 cents a lb.

* U.S. President Donald Trump said last week that he would slap an extra 10% tariff on $300 billion worth of Chinese imports and would raise it further if trade talks do not progress.

* Cotton has fallen more than 10% since Aug. 1 and by about 22% so far this year owing to a long-drawn trade war between the world's top consumer of the fiber, China and one of the biggest producers, the United States.

* "The price response is likely related to the escalation in the U.S.-Chinese trade conflict as China is a major supplier of cotton textiles to the U.S," Commerzbank analysts said in a note.

* "These textiles could be affected by the new U.S. punitive tariffs and as such would no longer be in demand. Chinese cotton demand on the world market would then likely decrease accordingly."

* Meanwhile, Beijing said it was honoring its pledges to purchase U.S. agricultural products, state media cited China's state planning body as saying.

* China had bought 25,000 tonnes of cotton from the United States between July 19 and Aug. 2, China's state broadcaster CCTV on Monday reported, citing an official.

(Reporting by Nallur Sethuraman in Bengaluru Editing by Nick Zieminski)