This follows a turbulent month for Lempriere since the retraction of QBE offering wool credit insurance.

The company says fellow wool exporters stand to lose comparable sums if credit insurance is withdrawn.

“Credit insurance offered a protection against default from our customers and is vital for the fine Merino market,” Lempriere’s trading manager Eric Durand said.

Mr Durand said countries such as New Zealand, Canada and China had moved to support its exporters following a reduction the availability of credit insurance, and called on the Australian government to follow.

Lempriere last year exported 140,000 bales of wool, of which 50 per cent was sold on an open credit basis.

The comments followed revelations in Rural Press that Europe’s largest wool processor Laurence Modiano had met with Minister Burke to request support for securing credit insurance.

The provision of wool credit insurance is an integral part of securing contracts with European buyers.

Mr Modiano this week said Minister Burke had sought input on whether wool users who had relied on credit insurance could purchase wool with letters of credit, as do the largest users of Australian wool, China and India.

In response, Mr Modiano said for the vast majority it would be virtually impossible to secure enough bank credit to do so.

”The irony is that in June and July we have noted a marked improvement in business sentiment, as the pipeline starts to restock from a very low level,” he said.

Mr Durand called on the Australian government to step in and fill the credit insurance gap left by QBE and offer short term insurance as it had done in the past through Export Finance and Insurance Corporation (EFIC), Australia’s export credit agency.

EFIC stopped providing wool credit insurance when the market was liquid, and the task was taken over by private enterprise.