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The local shortage in oil seeds is again affecting China's domestic cotton prices, with oil plants in many of the cotton areas reporting an oil seed shortage. Producers are still holding only a small amount of cotton; however, these producers may end up receiving the highest prices paid this season for seed cotton. The rally in price is being driven by a sharp rise in cottonseed oil and meal prices. Last week in Henan Province, ginners paid 6.60 to 6.66 yuan per kilogram per seed cotton. It appears that most of the cotton still held in growers' hands is in the provinces of Shandong and Henan.