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China Cancels Deal to Buy Thai Rice Due to Graft Probe: Thai Minister

China Cancels Deal to Buy Thai Rice Due to

Bangkok – China has canceled a deal to buy 1.2 million tonnes of Thai rice after Thailand’s anti-corruption agency launched investigations into a state rice-buying scheme, the Thai commerce minister said on Tuesday. The cancellation will add to the pressure on Thailand’s government, which is struggling to secure funds for the rice scheme at a time when farmers who have not been paid are protesting in the provinces.

“China lacks confidence to do business with us after the National Anti-Corruption Commission started investigations into the transparency of rice deals between Thailand and China,” NiwatthamrongBunsongphaisan told reporters. The deal between Thailand and Chinese state enterprise Beidahuang was signed on November 20, for delivery starting in December. The shipment was delayed, however, after Prime Minister YingluckShinawatra dissolved parliament in December.

Niwatthamrong said the government would open a tender to sell 400,000 tonnes of rice from its stocks next week. Industry experts estimate those stocks could be about 15 million tonnes. The government is desperate to get funds for the scheme because some farmers who have sold grain to the state have been waiting for months for their money.

The World Bank has estimated annual losses of 200 billion baht ($6 billion) since it was introduced in 2011. The government has struggled to sell the rice because of its high price at a time when global demand is thin. Opponents of the government are angry that taxpayers are footing the bill for a program they call tantamount to vote-buying. (Reuters)

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