P.M. BRIEFING : Fixed Price for Wool Abandoned
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CANBERRA, Australia — Bowing to market forces and increasing debts, Australia today stopped selling wool at a fixed price--a move that could halve the value of one of the country’s biggest export earners.
A scheme under which a floor price for wool was set at $5.40 a kilogram (2.2 pounds) was dropped after buyers continued to boycott sales, believing that the price was too high and that Australia could not afford to maintain it.
The Australian Wool Corp. has amassed a $2.1-billion debt and a 4.8-million-bale stockpile of wool--equivalent to 80% of annual output.
The government, which guarantees the debt, feared it could have reached $3.1 billion by next year, with a stockpile of about 6 million bales.
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