BANGKOK (Commodity Online) : Thailand on Thursday temporarily halted tapioca starch deals with China saying the prices proposed were too low.

Thailand’s Tapioca Policy Committee turned down a Commerce Ministry proposal to sell 200,000 tones of tapioca starch under a government-to-government contract to China.

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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 earlier.

The conditions oblige the government to sell tapioca starch at between 7,600 and 8,100 baht per tone. China's Ming Yang from Guangxi had proposed to buy 200,000 tones of tapioca starch from the Thai government at 7,950 baht a tone.

Thailand needs to re-negotiate for a better price, as the proposed price is lower than that paid by Thai firms to buy government stocks.

Analyst’s said 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, Thailand agreed to sell 340,000 tones of tapioca chips at 4,800 baht per tone to eight exporters, and another 100,000 tones of tapioca chips at 4,477 baht per tone 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.

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