The wool price tumbled again last week, with one broker saying he has not seen the market fall this quickly in the 40 years he has been in the industry.
The Eastern Market Indicator (EMI) has now lost 340 cents, or 16 per cent, since its record high in August.
"Growers and wool sellers have been taken by surprise," said Marty Moses of brokerage Moses and Son.
He said that it was a "bitter pill to swallow" and thinks the United States' trade battle with China was the cause.
"Export wool out of China has slowed right down so they're relying on their domestic market," he said.
Eamon Timms from Fox and Lillie agreed.
"The impact of the US tariffs and trade aggression against China is being shown quite clearly now, with retail spending in China being constrained and manufacturing figures showing a slowdown there," Mr Timms said.
He said smaller wool processors in China were talking about going down to three days a week and market resistance was beginning to show up in some international markets.
"A significant fabric maker in Italy said there had been a drop in sales of the lower quality fabrics to price conscious retailers who had swapped their buying over to non-wool fabrics or wool blend fabrics," Mr Timms said.
He said there were similar signs in other markets like Japan.
"Weavers and knitters in that market were buying yarns with polyester or nylon blended to keep the price down," he said.
While the fall in the EMI has been significant, the price of wool is still historically high and sitting slightly above the price at the same time last year.
