The drop comes amid warnings from market commentators that China's buying spree may be coming to an end.

Chinese buyers have just chalked up their best monthly wool buying spree, suggesting their Government's multi-billion dollar stimulus package has filtered through to the textile market.

The May Landmark Wool and Economic Focus reported China imported 81 per cent of Australia's wool exports in March, increasing its total volume by 2pc so far in 2008/09.

These figures cushion a downward trend in Australian wool volume, with exports down by 10pc in volume terms and down by 19pc in value terms.

China's appetite for wool has also spread across the Indian Ocean, with South Africa's wool exports to China rising by 55pc for the season 2008/09.

While Chinese demand will probably continue through to after the next month's wool selling break, analysts are nervous after last week's and today's notable absence and the continued fall in wool prices.

After last week's sale the AWEX EMI finished 29c/kg lower at 783c/kg, capping off a fortnight drop of 51c/kg.

Platinum Agribusiness expects the slump in prices could be jointly attributed to the higher Australian dollar, which fluctuated around the US79c mark by week end.

Landmark Victorian wool manager Stephen Keys said the strong currency was likely to dull appetite for Australian wool, and predicted further price constrictions and high pass in-rates this week.

The national pass-in rate reached 17.9 per cent last week, the highest since December 2008.

"Considering the small offering there is a lot of disappointment, we thought we could have maintained price levels," Mr Keys said.

"We are coming into a break and that gives some exporters the opportunity to go overseas to trade stock.

"Depending on the dollar, the break could work two ways when sales open again: it could open on a high but if there first few sales attract large quantity's wool wise this could stop any upward movement."

Finer Microns again fell sharply last week, closing around 60 cents lower while broader types dropped by 20 cents.

The smallest national offering in almost 12 months is expected this week with 32,420 bales forecast to be offered in two centres.