China cancels Thai rice deal

China has cancelled a deal to buy more than a million tonnes of rice from Thailand due to a probe into the government's subsidies for rice growers, caretaker Commerce Minister Niwattumrong Boonsongpaisan said on Tuesday.

Mr Niwattumrong said a Chinese state company terminated a contract to buy 1.2 million tonnes of rice.

He said the company was afraid it would run into problems due to an investigation by the National Anti-Corruption Commission (NACC).

The rice scheme is a flagship policy of Prime Minister Yingluck Shinawatra's embattled caretaker government.

Critics say the policy of buying rice from growers at above market prices has accumulated losses of at least $4.46 billion and has been dogged by corruption.

Thousands of farmers have blocked main roads in the provinces to demand overdue payments from the government.

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