Yet another export giant will exit the wool game, citing poor margins and falling demand from China as reason for the decision.

Queensland Cotton was one of Australia’s leading wool export companies, selling on about 150,000 bales annually, but parent company Olam International is shutting the division down.

The move follows Landmark’s 2013 decision to cease its Dalgety and Viterra wool exporting operations.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 14 seconds 4 m 14 s Wool manager Michael Avery announces Olam International's decision to cease exporting Australian wool. ( Danielle Grindlay ) Download 1.9 MB

“The short term issues for us are that our biggest single trading partner is China,” wool general manager Michael Avery said.

“And it’s well documented that the China economy is slowing and certainly there is a lot more credit constriction in China, which has reduced their ability to take on wool.

“Now I think that’s a short term thing, but something that will impact on the wool business probably for the next 12 to 18 months.

"However, that might not be reflected in prices because of the supply situation.”

Mr Avery says the company was sitting second or third in Australia in terms of export wool volumes, but is confident other companies will pick up the slack.

Even as number two exporter, he says Olam International was only exporting 7 per cent of the Australian wool clip.

“I think that everyone that’s involved in the wool industry would know that sheep numbers have been declining in Australia for the best part of 15 years,” he said.

“We’ve got wool numbers now that are at historically low levels and the size of that export cake has been diminishing.

“Now certainly it will require extra capital for those companies that are still in exporting, but there’s probably 40 of those companies out there that can take up a bit.”

Mr Avery says the decision will not impact on wool growers and suggests demand for Australian wool will remain strong.

“Olam’s decision is purely to do with whether we can see satisfactory margins coming back into the greasy wool space and we don’t see that happening,” he said.

The wool division made up less than 1 per cent of Olam International’s business.

Seven employees will be made redundant, including buyers, shipping managers and others in charge of documentation.

“Olam has seen that it’s very, very difficult to maintain trading margins that are in line with the other 40 commodities they’re in around the world.

“You know, if you don’t hit those benchmarks, we’re better utilising that capital somewhere else.”

Queensland wool manager at the Australian Wool Network Maurie McNeil says the announcement isn't a surprise. Listen Duration: 1 minute 56 seconds 1 m 56 s Listen Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Queensland wool manager at the Australian Wool Network Maurie McNeil speaks about Olam International's decision to wind down their wool exporting operations ( Kathleen Calderwood ) Download 908 KB

"It's something that those of us that are in the industry have experienced before today... it's the state of the current volumes that are now traded in the country."

Mr McNeil doesn't expect this announcement will significantly affect producers.

"Hopefully it won't affect Queensland producers at all, the orders for wool overseas are still there they will just have to be filtered through other exporters remaining in the industry.

"What it means is one less buyer at the moment operating in the room, I guess it's not out of the question that somebody else may come in and fill that void.

"But based on the current volumes it is probably most likely that those orders will be placed with current exporters."