The Australian wool market has suffered severe losses this week. Sales resumed after the annual mid-year three-week recess. As this was the first selling opportunity for nearly a month, quantities increased, there was 42,734 bales available to the trade, 7,502 more bales than the previous sale (Week 2). As the market opened in the Eastern centres on the first day, it was immediately apparent that large price reductions were on the cards. The individual Micron Price Guides (MPGs) in the East fell by 110 to 173 cents with all types and descriptions affected. On the back of these losses the AWEX Eastern Market Indicator (EMI) fell by 101 cents, this was the largest daily fall in the EMI since August last year, the EMI lost 8.9% for the day, this was the largest daily percentage fall in the EMI since 2003. On the second day of selling prices continued to fall, but at a less dramatic pace than was experienced on the first. The MPGs in the East dropped by a further 13 to 57 cents, the EMI lost another 27 cents. The EMI fell by 128 cents for the series, closing the week at 1,006 cents. This was the highest weekly fall in the EMI since April (when it lost 155 cents). However, when viewed in percentage terms the EMI fell by 11.3%, this was the highest weekly fall since 1991, when the floor price was abolished and the EMI fell by 39.1%. The large drop in price understandably pushed the passed in rate up, nationally 30.1% of the offering failed to reach seller reserve. The skirtings followed a similar path to the fleece, prices were generally reduced by 80 to 120 cents. The crossbreds suffered losses of between 35 and 82 cents, when viewed in percentage terms these losses were similar to the merino fleece. The national quantity reduces next week to 33,413 bales, Fremantle only requires a one-day sale, selling Wednesday.