The New Zealand Wool Group, the industry marketing association, expected the move to push prices up, but not hugely.

``Premier Zhu Rongji has informed me that China has now resolved administrative problems in its system for allocating tariff quotas for wool,'' Shipley, who is on a tour of East Asia, said in a statement received here.

New Zealand wool growers, who annually export 180,000 tonnes of wool, said the move had been rumoured for several weeks and new business was already being conducted with China.

Wool destined for processing for re-export had not been affected by the difficulties of the past six months but, rather, wool for domestic consumption in China had been stalled.

``These delays saw our sales in this NZ$200 million ($105 million) wool export market drop by NZ$80 million in the year to May,'' Shipley said.

``New tariff quotashave now been issued to provincial buyers and this should see wool imports from New Zealand increase in the second half of this year.''

NZ Wool Group's general manager of policy, Roger Buchanan told Reuters the resolution of the tariff issue was ``good news for wool producers everywhere.''

``There's plenty of quota. The market will determine who will benefit,'' he said.

``We would expect it to have a positive effect (on prices) but we wouldn't expect it to be huge.''

``It's a global issue. It's not unique to New Zealand. China determined a global quota a couple of years ago and since then it's been wrestling with how it was going to manage this quota.''

Two years ago, China purchased 40 per cent of New Zealand's wool exports but this had dropped to six to seven per cent in the past six months, he said.

Palle Petersen of New Zealand's Wool Exporters' Council said the finer end of the crossbred clip, the half-bred and cross-bred hogget-type wools, would likely see a price increase.

``The other(export) markets will have to pay the new price...the first decent auction is on August 5,'' he said.

``China has been out of the market for the past six or seven months and traditionally they had been taking 25 to 30 per cent of the total wool clip here.''

Some wool intended for China remained in New Zealand in stockpiles in a few exporters' hands, he said, estimating that 15 per cent of last year's wool clip was so far unaccounted for in export figures.

Another unknown for New Zealand exporters was the prospect of Australian wool being in China's ports awaiting tariff resolution, he added.

Australia and Latin America are the other main participants in the business of supplying China's processing industries with imported raw material.

Wool for domestic hand-knitting and machine knitwear in shetland-type products are the two main sectors of New Zealand's current supply interest in China.

The New Zealand Wool Group earlier this year forecast national wool production to rise by 0.9 per cent in the1999-2000 season, with the average auction price expected to be flat at NZ$4.10 per kg -- about one cent above current levels.