UPDATE RECEIVED FROM YUAN AND ASSOCIATES:

Today all major media published a joint notice that was issued on October 29 by seven official sectors related to the cotton industry. The notice recommends strengthening cotton market supervision; enhancing quality supervision; improving railway transportation capacity; managing financial support to ensure sufficient purchasing funds; and strengthening information services and market guidance.

We followed-up with CCA regarding this notice and they notified us that NDRC may issue 2011 TRQ quota soon. Also, in addition to growing concerns among officials in the industry, higher cotton prices have begun to be passed to downstream products.

Please see the attached memo for more details.

10-1109 YUAN CHINA UPDATE