Tapioca starch sale to China blocked

       Deputy Prime Minister Korbsak Sabhavasu insisted yesterday the Commerce Ministry must renegotiate its tapioca starch deals with the Chinese government, saying the prices proposed were too low.
       Mr Korbsak made the comment after a meeting of the National Tapioca Policy Committee on Monday turned down a Commerce Ministry proposal to sell 200,000 tonnes of tapioca starch under a government-to-government contract to China.
       The rejection has reportedly baffled the Commerce Ministry, as the deals were said to be handled according to conditions and guidelines set by a similar committee chaired by Mr Korbsak.
       The conditions oblige the government to sell tapioca starch at between 7,600 and 8,100 baht per tonne. China's Ming Yang from Guangxi had proposed to buy 200,000 tonnes of tapioca starch from the Thai government at 7,950 baht a tonne.
       But Mr Korbsak insisted yesterday that the ministry needs to re-negotiate for a better price, as the proposed price is lower than that paid by Thai firms to buy government stocks.
       At the committee's meeting, Mr Korbsak said the government was paid 8,300 baht a tonne when it sold 130,000 tonnes of tapioca starch stocks to six firms.
       "The government earns much better prices from selling the products in the domestic market. So the deals to foreign buyers at cheaper prices do not make sense," said Mr Korbsak.
       He added that the rejection was unlikely to affect relations between the two countries, as China is now rich and can afford tapioca starch at higher prices.
       In other deals, Mr Korbsak said the committee had agreed to sell 340,000 tonnes of tapioca chips at 4,800 baht per tonne to eight exporters, and another 100,000 tonnes of tapioca chips at 4,477 baht per tonne to three companies for sale domestically.
       Thailand is the world's biggest exporter of tapioca products, controlling 75% of the global market. Exports take the form of chips, pellets and flour.
       The government is currently estimated to hold about 400,000 tonnes of tapioca starch and 1.7 million tonnes of chips.