The correct answer is option 1, Australia. Australia is the largest producer of wool in the world. Australia is renowned for its high-quality wool production, and it has been a major player in the global wool industry for many years. The country has vast grazing lands and a favorable climate, which are essential for sheep farming. Australian wool is highly sought after due to its fine texture and superior quality. The wool industry in Australia contributes significantly to the country`s economy and provides employment opportunities for many people. While China is also a significant producer of wool, Australia holds the top position in terms of production volume.