David Sasson, executive director of the Australian Wool Group (AWG), said that he was preparing a revised and fully-funded new bid for both stockpiles.He would not indicate the intended offer price in AWG's new bid, the latest in a series of so-far failed attempts, dating back to late 1997. However, past offers by AWG for the official stockpile have been worth more than A$1 billion.

Well-connected AWG, which has a former leading industrialist, a former New South Wales premier and the present chief executive of the Sydney Futures Exchange as directors, was waiting on progress with privatisation of statutory authority WoolInternational (WI) before it launched its new bid, Sasson said.

An interim advisory board established by the Federal government under the chairmanship of former National Farmers Federation (NFF) president Don McGauchie is working on the privatisation of WI, to take place after July 1.WI had the responsibility of managing the now-frozen sell-off of wool from Australia's official wool mountain and is the present vehicle for ownership of the official stockpile.

Sasson said that AWG was planning to bid for the unofficial wool stockpile, which he estimated at 8,00,000 bales, as well as the official stockpile of 1.05 million bales.Sasson said wool growers were standing back from auction sales at present prices, causing the unofficial stocks of wool in brokers' stores and on farms to continue to grow.

"There's a real reluctance to sell at anything under 500 cents," wool broker Bill Mitchell of Wesfarmers Dalgety Ltd said. Lack of supply was the main reason physical market prices were holding up at all, hesaid, noting that mainly medium quality wool was affected.

Australia's wool stockpile grew to a peak of 4.7 million bales in 1991 as a result of the failed reserve price scheme of the 1980s and early 1990s, which attempted to put an artificial floor under collapsing prices.When the scheme was abandoned in 1991, the price of wool fell to a record low of 429 cents a kg clean in 1993, before recovering to almost 900 cents a kg in 1995 before collapsing again to present prices of less than 500 cents a kg.

Earlier, the key wool auction price figure, the Eastern Market Indicator, was languishing at 496 cents a kg. The Australian government placed a freeze order on WI's stockpile just before the last Federal election, in early October 1998. (Reuters)