The State Railway of Thailand will negotiate with representatives from the Chinese government for the next step and hopes to conclude the barter trade project within 15 months.

The tapioca will come from the government's pledging programme for the 2005-2006 harvest season. The tapioca crop this year is expected at 19 million tonnes. Currently, about 30,000 tonnes of tapioca are in the government's stockpiles.

Preecha said the barter deal would raise the domestic tapioca price. Some tapioca traders have reduced prices to less than Bt1.30 per kilogram. The government guaranteed price is Bt1.50 per kilo.

If the amount of tapioca is not sufficient for the barter trade, China is prepared to accept Thai rice as well, Preecha added.

Preecha said that at first China wanted to conduct the barter deal with rubber. However, Thailand's stocks were not large enough, so the Chinese government accepted tapioca because it is in high demand in China.

Meanwhile, the State Railway of Thailand plans to import 13 locomotives from China in a separate deal. Preecha said the railway might also barter for the trains using other agricultural goods such as fruit. The government aims to buy 5 million tonnes of tapioca through its pledging programme. About Bt1.2 billion will be used for the tapioca price subsidy.

The export price of tapioca chips is US$105 (Bt4,103) per tonne.

Petchanet Pratruangkrai

The Nation