WORLD wool production fell 7.5 per cent last year and is expected to decline a further 2 per cent.

According to the latest surveys tabled at the International Wool Textile Organisation, the world produced 1100 million kilograms of clean wool last year.

Nearly 65 per cent of this clip was produced by 10 producer member countries of the IWTO.

Australia accounted for about 25 per cent of the total world clip which includes the coarser or broader micron categories more suited to non-apparel wear or industrial usage.

National Council of Wool Selling Brokers executive director Chris Wilcox, who conducted the IWTO survey of producer countries, said the strong demand for sheep meat, as in Australia, was the major driver of the flock trends.

Mr Wilcox said the IWTO survey did not include flocks of many African, Middle Eastern, European and Eastern European countries.

He said New Zealand and South Africa were the only countries expected to record an increased clip this year, although the Australian clip was tipped to rise by 3 per cent in 2010-11.

Mr Wilcox said China ran the world's largest flock, and even though the Chinese clip of 340mkg greasy was low yielding and of lower quality, 33 per cent would be 24.5 micron and finer.

Mr Wilcox said there was a trend for the Chinese to shift away from woolled sheep.

Other countries affected by the high sheep prices were the UK and the US where slaughtering rates were on the increase. Both countries were expected to record fewer sheep and smaller clips next year.

But despite smaller flocks resulting from the demand for sheep meat, Mr Wilcox said the world supply of superfine - 18.5 micron and finer - was on the increase.

Total superfine production from IWTO member countries in 2008-09 was 57.3mkg of which which Australia produced 47.3mkg or 82.6 per cent.

New Zealand was the next major supplier with 4.4mkg followed by South Africa with 2.1mkg.

Mr Wilcox said Australian superfine production could soon begin to ease due to several factors.

These included a reduced supply of drought-affected or hunger-fine wool coupled with the trend of growers moving to heavier framed sheep and the increased use of terminal sires.

The absence of any major price benefit in recent years was also likely to be a disincentive for superfine wool growers.