The Russian army has bought up most of the wool in the world this year! Nobody else will be able to afford to buy clothes this fall!

Wait, wait a second, it was the British army. Yes, that's it, and we'll all have to wear polyester!Talk to people in the clothing industry, and you will hear all kinds of reasons for a predicted 10 percent increase in the price of wool. Whether there is any truth to stories of increased army wool consumption, worldwide demand is generally up.

Actually, the price increase will mostly be seen where fine wool is used most, in "men's better suits," which is the industry's term for suits over $400. (People at expensive men's stores tend to refer to $200 suits as "cheap.") This year, they say, a $400 suit will cost $440; $500 will go to $550.

What is happening, according to various wool-marketing spokespeople, is an increase in worldwide demand combined with a weakened dollar. "It's only the law of supply and demand," said Len Frye of the North Central Wool Marketing Association, based in Minneapolis-St. Paul.

Wool growers are actually getting 30 percent to 150 percent price increases for their product, according to Fred White Jr. of the Ohio-based Mid-States Woolgrowers Association.

But don't get outraged: Recently, he said, they were getting only as much money as they got back before the Second World War. (That's actual dollars, not adjusted dollars; high-quality wool that sold in 1939 for $1.50 still sold for about $1.50 two years ago, according to White.)

American woolgrowers produce only about 30 percent of the wool used here. The weaker dollar comes into it because Australia and New Zealand, the biggest wool producers, actually ran about 3 percent short because of increased demand from the major consumers: China, Japan, Italy and the Soviet Union. Chinese production of finished wool has increased dramatically in recent years, Frye said, because of newly installed Japanese weaving equipment.

Because one-third of the cost of a suit is in the fabric - the rest is labor - that 30 percent increase in fabric cost means a 10 percent price jump in the final cost of the suit. (If you want to know how many pounds of raw wool went into your suit, he said, double the weight of the finished garment - 10 pounds of wool to make a five-pound suit of the highest quality.)

That may not sound like much, but it could make a difference in buying habits if the trend continues, according to Michael Wright, of Sims, an upscale Minneapolis menswear store. "People set certain limits - `I will never spend $500 on a suit.' . . . We have seen a slight effect (from higher prices) over the years," he said. Some customers left at $300 and some dropped out at $400, "and you just don't see them anymore." But the majority of "better" buyers will ride out the price increases, he said.

In any case, the price of everything goes up, said Wells Gustafson of Anthonie's, another tony men's store. "This has been going on gradually over the past five or six years. Prices went up at least 5 percent last year and the year before," he said. "We also see it in silks and cottons - it's the shrinking dollar."