According to a report by Rural Bank, restrictions on Australian wool exports to China coupled with the lack of viable alternative markets, would have a presumptively crippling effect on the Australian wool industry.

Using average annual report figures from the last five financial years, the report showed China is Australia's largest market for wool exports and has been since the early 1990s, with two-thirds of all Australian wool production exported to China.

China accounted for 77.4 per cent of the value of Australian wool exports in 2019/20, totalling $1.9 billion. This makes wool the most heavily reliant agricultural commodity on China.

At the recent Australian Wool Innovation (AWI) Annual General Meeting (AGM) AWI CEO Stuart McCullough told the meeting the demand for Australian wool overwhelmingly came from China in 2020.

He said China is a unique partner from a manufacturing point of view, but also from a consumption point of view, currently processing about 83pc of the Australian wool clip of which half of that they are domestically consuming."

But he said, AWI is trying to bolster its relations with its industry partners. AWI has had an Emerging Market strategy in place for the past eight years, with good amounts of success. This has seen an increase in processing and consumption of wool in places including India, Vietnam, Bangladesh and Sri Lanka.