Wool shortages worldwide have begun to drive prices upwards, on the back of serious production decline in Australia.

The latest nationwide wool auction reached a 99% clearance rate, as prices leapt in some cases by half when compared to last year.

WSI broker Malcolm Ching says demand across the board was sky high.

“It was a pretty substantial lift – basically anywhere between 7 and 11 percent, mainly created because of demand.

"There’s probably more demand than anticipated, because there’s uncertainty about supply of wool over the coming weeks.

"Of course, the world’s supply line is pretty empty at the moment too.”

Mr Ching says those who had done their homework were duly rewarded with better product at better prices.

“It depends how you’re positioned.

If you’ve forward sold and you don’t have counterbalancing stock, coming in to the market at today’s levels you’ll be losing money.

If you have been following the market and positioning yourself well, it’s just another good lift.”

Commentators don't believe global supply issues will be fixed in a hurry, many agreeing there could be several years of strong prices before production lifts again.

WSI has a full report available on their website here.