In India, the second-largest importer of wool after China, recent price fluctuations have resulted in stress on the industry.
In the past four weeks, the price of Merino wool (20-21 microns) slipped from A$1,250 (Rs 71,250) a kg to A$1,175 (Rs 66,975) a kg CIF (cost, insurance and freight) value.
The strengthening of the Australian dollar has added to the importers' concerns.
S K Patodia, head (wool business), Aditya Birla Group, said, "This is a tumultuous time for the industry.
"The demand for wool in international markets is regulated by the behaviour of Chinese buyers, as China imports about 80 per cent of the wool.
"Due to the sluggish demand from China, the price of Merino wool is on the slide -- there is a drop of 25-30 per cent.
"When sentiment is low, this has a multiplier effect.
"Buyers defer their purchases, anticipating a further fall in prices. The stocks purchased at higher costs exert pressure on buyers."
Woollen yarn mills were running at capacities of only 60-70 per cent, he added.
Of the overall wool exports from India, garments account for half, while the remaining comprises wool top (a semi-processed product from raw wool), yarn and fibre.
The slowdown in developed countries has also hit Indian wool
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