Output is now expected to fall by 7.5pc for the 2008-09 wool selling season, compared with last year's.

Disappointing rainfalls in spring across south-eastern Australia, following the dry winter and autumn, forced this revision of the September clip forecast.

The estimate comes from the Australian Wool Production Forecasting Committee.

Committee chairman, Russell Pattinson, said, “Despite excellent rainfall in the northern half of Australia over spring and in Western Australia, this has come too late to offset the lower sheep numbers and a further fall in production in Victoria, South Australia and the southern half of NSW.”

Also, the significant sell-off of sheep across Australia in 2007-08, particularly in autumn, has meant that Australia had significantly fewer sheep at the start of this season - the Australian Bureau of Statistics estimates 79.2 million head at the start of the 2008-09 season (down 7.5pc).

“The sell-off of sheep continued over winter, with sheep slaughterings across Australia up by 10pc in the September quarter, due to the dry seasonal conditions and concerns about feed availability," he said.

"This has meant that, with fewer sheep for shearing, production in Australia will be lower than the committee expected in September.

“On a more positive note, the widespread rainfall in November will encourage improved summer feed and water supplies in many parts of Australia.

"This may help slow or even halt the sell-off of sheep.”

Production is forecast to fall in every state in 2008/09, with the largest declines compared with 2007/08 numbers, expected in the south-east states of Tasmania, Victoria and South Australia.

* A full report of the updated forecasts will be available after 2pm on Wednesday, December 17, on the AWI's website at www.wool.com.au/forecasts.

The next meeting of the AWI Production Forecasting Committee is scheduled for March 26, when the committee will release its revised forecast for 2008-09 and its first forecast for 2009-10.