At the beginning of February, with over half the 2006/07 season complete, the amount of wool tested in Australia remained stubbornly similar to the same period 12 months ago. This is despite a forecast decline in wool production for the full 2006/07 season.

A large increase in the amount of wool tested in Victoria and South Australia for January 2007 helped push the total amount of wool tested season-to-date in Australia back into positive territory compared with July 2005 to January 2006.

The large increase in Victoria and South Australia is a combination of low test volumes in the same month the previous year, and wool continuing to be delivered into broker's stores from farm storage as higher prices and the desire for cash flow due to the drought encouraging destocking.

Victoria and South Australia recorded the stongest increases in the amount of wool tested in January 2007 compared with January 2006 however, the other states also recorded some increases. Even Western Australia, which is expected to be the hardest hit by the drought in terms of wool production.