Callum Downs Commodity News analyst Malcolm Bartholomeus says it is "unfortunately a case of welcome to the world commodity squeeze and this is now officially ugly".

"It is no different to copper, oil, corn or wheat. We can now add wool to the list of commodities that have fallen rapidly of late," Mr Bartholomeus said.

"It is pretty disappointing but it is the reality of the world situation at the moment."

Mr Bartholomeus says long term trends suggest the EMI can be expected to fall another 100 cents to 660-670 cents as part of a "normal" downward cycle.

"It could be well into 2009 when the market rebounds, it is very hard to tell in this climate," he said.

When asked what the future of wool was given the unviable nature of growing wool at such prices, the market analyst pointed to the various times in the last few years when the EMI has been well above 900 cents per kilogram clean.

"I mean woolgrowers have had the chance to capture these prices many times, whether it be through holding wool over or forward selling which is has not always been useful it has to be said.

"But in recent years we have had the EMI well over 900 cents from early 2002 to mid 2003 and for much of the period from late 2006 to the middle of this year.

"Being more opportunistic with pricing is the way the woolgrower must sell to survive and I can't believe some people were still advocating holding wools at the start of this year.

"There was plenty of warning that this was coming and that prices offered at the start of this year were very good."