But at the fine end of the market, commentators have been pushing back their predications of when the European buyers might return to breathe some much needed life into prices in that sector.

Many are now expecting the sub 19 micron section to remain subdued for the rest of the year and start of 2010 as retailers continue to wait for wool stock to move before placing new orders.

“We are confident that the market will turn back but it is going to be a slow process,” New England Wool managing director Andrew Blanch said.

“It’s a Chinese dominated market with very little price difference between styles and grades of wool – but that said there is an over supply of fine wool.”

Australian Wool testing Authority reports a 243 per cent increase in the production of fleece wool of 19.5 micron and finer in the 19 years from 1989-90 to 2008-09.

“We have been saying for a long time that there is too much fine wool and now we are seeing the consequences,” Mr Blanch said.

Platinum Agribusiness is reporting premiums in the futures market to cash prices, in particular 900c/kg for 21 micron and 850c/kg for 22 micron.