We have just received the following information from our Chinese office:

 The Chinese government have announced a financial incentive to support cashmere raw material prices for next season’s clip.  They have agreed to make an interest-free loan to the following companies to purchase the following quantities of greasy cashmere :-

 ERDOS                          3000 tons

KINGDEER          1000 tons

Other major Chinese dehairers collectively  –  2000 tons.

This amounts to more than half the annual Chinese clip and will almost certainly instigate panic buying from other cashmere processors, leading to fibre shortage and increased prices.

 This policy will almost certainly affect demand and prices of Mongolian cashmere next year.

 We will pass on any further information as and when received.

 For and on behalf of Cashmere Fibres International Ltd

David M Lee

19 November 2009