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Thai firms target China's northern cities

FIVE million tons of modified starch worth 40 billion baht (US$1.16 billion) will be shipped to China over the next five years under a memorandum of understanding recently signed in a major north China city between a Thai firm and a Chinese company, Thai media reported yesterday.

According to Bangkok Post online, the deal was secured during a visit to China by the minister in the Prime Minister's Office, Virachai Virameteekul, who joined 100 delegates from northern Thai public, private and farming sectors in an agricultural road show in Tianjin in north China between last Thursday and Monday.

Rungroj Hemansuthikul, president of Thai company Power Unity, was quoted as saying the deal would help bolster domestic tapioca prices in the 2009-2010 season, when the government plans to replace the current price pledging scheme with a price guarantee program.

Under the MoU signed by the company and Guang Xi Ming Yang, a Chinese starch manufacturer, the latter agreed to buy 1 million tons of Thai modified starch annually for five years, starting from the 2009-2010 tapioca harvest, the report said.

One million tons of powdered starch account for about 12 percent of Thailand's tapioca production forecast in the 2009-2010 season. With 75 percent of the global market, the country is the world's biggest exporter of tapioca products.

Tianjin's road show was the first of the five Thai government-backed road shows to be held in other major northern China cities - Beijing, Dalian, Shenyang and Xi'an.

Virachai said the government plans to penetrate markets in northern China by using Tianjin, near the national capital Beijing, as a gateway to other major cities.

In related developments, Thai companies have also clinched another two MoUs with China to set up a distribution center for fresh and processed Thai fruits in Tianjin and other parts of northern China.


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