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SYDNEY, June 11 (Reuters) China could take over from Japan as Asia's price setter in annual iron ore negotiations, possibly from next year, the world's top producer Companhia Vale do Rio Doce (CVRD) said on Sunday.

In an interview with Australia's ABC TV's Inside Business programme, Brazil's CVRD said China had lagged Japan in settling contracts this year because it was ''not so fast'' and still coming to grips with market negotiations.

But China, which imports almost twice as much iron ore as Japan, wanted to be the price setter in Asia and would soon take the leading role, Jose Carlos Martins, CVRD's executive director, said.

''I think they deserve it by the size they have. I think they will. But they need to be faster ... in their decision-making process,'' he said.

China is now the world's biggest importer of iron ore. It's steel-making industry is expected to consume around 300 million tonnes of ore imports in 2006.

Japan set the price tone for Asia this year by agreeing in the middle of May to a 19 percent price rise with CVRD and major Australian producers Rio Tinto Ltd./Plc and BHP Billiton Ltd./Plc.

European steel makers have also accepted a similar price rise for their iron ore supplies.

China has been reluctant to accept the price, although CVRD said this week it was confident that China's mills would fall into line with their rival producers.

Australia is the world's biggest iron ore trader, slightly ahead of Brazil with a share of around 40 percent of the booming global market. It is forecast to export around A$18 billion ($14 billion) worth of the ore in 2006/07.

China needed to re-focus from a China-centric position to see iron ore as a global market, and to come more to terms with market-oriented negotiations, Martins said.

''The learning process is a very difficult process,'' he said when asked about attempts by the Chinese government to intervene in negotiations this year.

A strong iron ore market prevented Chinese steel mills from playing the main iron ore suppliers off against each other in negotiations this year, Martins said.

''We have been running out of iron ore this year. No inventories. Difficult to supply. There is no iron ore. We have much more demand than the iron ore we can produce... It is quite impossible to play one supplier against the other,'' he said.

Martins said it was too early to say whether CVRD would seek another price rise next year, after the 71.5 percent rise of 2005/06 and the 19 percent rise just negotiated for 2006/07.

He added that CVRD was enthusiastic about increasing its business presence in Australia after buying into a coal project in Queensland state last year.

CVRD preferred greenfield development but would consider acquisitions if price and opportunities were right.

($1=A$1.33) REUTERS PV KP1816