Despite criticism of the government's freeze by Australia's main wool industry bodies, brokers said the freeze decision helped stabilise the market on Wednesday.

"The market's the same as yesterday, it's not moving in either direction at a great speed," one wool auction broker said on Wednesday afternoon. No official prices are released until after the market closes.

He said the market was confused by the higher number of brokers in the bidding process on Wednesday, but brokers trying to sell lots passed in on Tuesday appeared to have renewed orders.

One buyer said Koreans, who had backed out of the market when the Asian crisis struck, re-entered bidding on Wednesday.

On Tuesday, the Australian Wool Exchange's eastern market indicator tumbled more than seven percent,or 45 cents, to 548 cents a kilogram, the first day's trading after a three-week recess.

The Australian government announced after the market closed that it had decided to freeze sales from Australia's wool stockpile of 1.12 million bales for the rest of the 1998/99 selling season.

Wool futures rose on Wednesday across the contract range by between eight cents and 12 cents a kg by mid-afternoon on reasonably solid turnover.

Agricultural futures broker Phil Lindsay of Ord Minnett Jardine Fleming Futures attributed the rise to the government stockpile sales freeze.

He said the freeze of stockpile sales would divert some merchants who had been buying from Wool International, which manages sales from the stockpile, into the auction system.

With physical wool offerings in Australia in coming weeks at historically low levels, wool prices would probably be firm over the next four to six weeks, he said. Lindsay added that statements by Wool Council Australia during trading on Tuesday that the industry hadreached a decision that stockpile sales should not be frozen had prompted some growers to sell futures for hedging.

"Now they've been told that the stockpile has been frozen by government after the market closed. They're stuck in a difficult situation, they're going to have to review the whole scenario," he said.

Lindsay described the situation as unusual and reminiscent in tone of the early 1990s when the then government did away with the reserve price scheme for wool. Wool futures had dropped by 450 cents since the middle of 1997 and was still very oversold, he said.