Difficulties continue to impact the Chinese cotton textile industry. Facing higher energy, labor, and land costs eating into margins, many mills are curtailing production. As a result, trade in cotton yarns sank from year-ago levels for the tenth consecutive month, driven lower by steep declines in imports. May cotton yarn imports are down -16.9% from a year ago, lower for ten straight months, accelerating the cumulative 2008 decline to -15.9% from the same period last year.

Cotton yarn exports are faring little better, rising a scant 1.0% from May 2007 levels. After climbing to a record level last year, 2008 exports are up another 8.0% from the first five months of last year.