BEIJING (Reuters) - Gourmet coffee chain Starbucks Corp. expects sales growth will be "more than acceptable" without new price hikes as long-term supply contracts keep it insulated from rising coffee bean prices, Chairman Howard Schultz said on Monday.

Starbucks (Research) raised prices in the United States in October 2004 by an average of 11 cents per cup, lifting year-ago comparisons and causing some Wall Street analysts to say that sales growth may slow once the increase has been fully digested next month.

Schultz, however, told Reuters in an interview the October sales number would be "more than acceptable" after monthly sales have held steady at the high end of company forecasts of three to seven percent so far this year.

Schultz reiterated his earlier pledge that another price hike is not in the works, saying the company's long-term contracts and inventories had helped keep costs down amid rising prices of coffee beans.

"As a result of that, we are insulated from the current fluctuations and, most importantly, have no plan to raise prices," Schultz said.

Its Japanese affiliate, Starbucks Coffee Japan Ltd., racked up its first same-store sales increase in four years in August.

"I certainly don't think the market is overcrowded," Asia-Pacific President Christine Day said. "We're looking actually to accelerate our growth plan in the market, and we're very optimistic about where the business is currently."

With CD sales emerging as a bright spot, Schultz said books may be the next item to get shelf space in front of the company's 40 million weekly customers as they line up for their morning lattes.

"We are exploring what else we can use in terms of other forms of entertainment, maybe literature? Literature is, I think, a natural extension," Schultz said.

Starbucks had about 600 stores in java-guzzling Japan, but China is the most promising market for the firm, which has hung its green mermaid logo outside nearly 10,000 stores globally.

Since entering China in 1998, Starbucks has opened some 140 stores, betting that it can convince a nation of 1.3 billion tea drinkers to try a different kind of brewed beverage.

Starbucks has three local partners in northern, eastern and southern China, but the company has also started opening stores directly as the Chinese government loosens regulations on foreign ownership in the sector.

"I don't think there's a market in the world today for us that rivals the growth and development opportunity, and the early acceptance that we're enjoying throughout the country, that China has," Schultz said.

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