At early sales this week the market was holding firm to slightly stronger, particularly at the finer end.

This week's national offering of 19,777 bales is the lowest offering for more than two years.

Early market reports from Melbourne showed a lift for the better 19-20 micron wools and broader wools were trading steady to last week's increased rates according to the Australian Wool Exchange.

Better quality 19 micron wools were selling at 1120c at early sales on Wednesday in the south, with better 20 micron types at 930 and 22 micron wools at 855.

Having dropped about 20pc since its January high of 1050 cents, the eastern market indicator (EMI) rallied strongly on the back of very low volumes last week, a lower Australian dollar and the need to fill shipping orders before the end of the financial year.

Any lift for whatever reason has been welcomed by growers desperate to see wool join the commodity boom that has seen grains prices trade at record levels at times this year.

Quality Wool broker, Brian Vagg, said the message was finally getting through to buyers overseas that there was very little wool around due to the drought, the move to other enterprises such as cropping and prime lamb production together with the loss of productive land to forestry MIS schemes.

"Looking forward at the five-week forecast, there just aren't the volumes there. The unknown stockpile in private sheds and brokers stores is non existent and this message is now finally being heard.

"The huge move away from wool is hitting home. I hope the market will continue to rally along these lines because many people see keeping Merino sheep as unviable with an EMI below about 850c, so the industry can't afford to see the market drop much lower than where it is now."

Last week the EMI gained 3pc or 25c to 870c a kilogram clean with 8.3pc of the 30,000 bale offering was passed in.

The drop in the Australian dollar of about 1.5c to US93.9c during the week accounted for only part of the market lift as in US dollar terms the EMI lifted only 1.4pc or 11c to 817c a kilogram clean.