The months after the European fashion and trade events are typically the industry’s busiest as European buyers place their orders for Australian wool in time for the winter retail market.

But it may be harder to sell wool this year with the retreat of QBE Insurance from the sector and the continual rise in the cost of credit risk insurance from remaining insurers scaring potential buyers.

The international insurance and reinsurance group - rated one of the top 25 in the world - told policy holders in the wool, leather, construction and various textile exporting industries in May this year that because of risk it would not be renewing any policies from July 1.

“This has made business harder,” said one source within the Australian export sector.

“I don’t think there is anyone who does not think it won’t make trade difficult…..some business probably won’t occur because of it.”

Exporters such as Fox and Lillie, Elders and New England Wool have gone on the front foot, tying up credit insurance with the few remaining insurers – largely Coface and Atradius - and are negotiating with European clients about different terms of payments.

But Rural Press understands that its premiums have been increasing.

Fox and Lillie managing director Jamie Lillie said Europe accounted for between 25-30 per cent of its client market.

“It (the removal of credit insurance) will have an affect and no doubt decrease (wool) volume into Europe,” he said.

“But that affect won’t be across the board - there are plenty of good companies in Europe that can be supplied too. We still have insurance and the orders are going.”

Mr Lillie said the European 120-day pay turnaround meant Australian exporters were forced to finance wool for almost half a year – and insurers were exposed to this long risk.

In China, which buys the bulk of Australian wool, buyers operated on letters of credit and were not vulnerable to changes in credit insurance.