Confirming the decision yesterday, Elders general manager Mike Geurin said the company would still buy wool at auction and increase its indent buying.

"We have never covered the capital costs through trading in our own name in greasy wool and it adds no value for our growers, but we will still be buying for our processing plants in China and Europe as well as other operations we buy for," Mr Geurin said.

The move is a massive play for Elders who have rationalised back to its core service and in doing so is closing its risk management services in the medium term.

"We have plenty of customers that we will be looking after by finding better providers, organisations that provide risk management as a core service such as banks and trading houses," he said.

Mr Geurin admitted the move was a big one for one of the biggest names in the Australian wool industry but said it strengthened the position of the company for the future.

"This move is to the benefit of everything we do in Australia and focuses our time and energy into what we are good at and that is adding value for woolgrowers.

"We have underinvested in that core business in recent years.

"This industry has declined over the last few years but it is now stabilising and I think it has a wonderful future if we work at this level correctly."

While the decision would result in some redundancies in wool trading, Elders expects that re-deployment options would be available for most of the affected employees within the organisation.

Speculation was rife throughout the wool trade earlier this week that Graincorp was to also close its wool trading arm but when contacted by Rural Press, Graincorp public relations spokesman David Ginns said the company would not be making any announcement on the matter and would not comment on whether the speculation was accurate.