China has pulled out of a huge rice contract with Thailand because of a corruption inquiry into a rice purchase scheme.
The Ministry of Commerce said the Chinese government pulled out of the the deal to buy 1.2 million tonnes of rice because of the inquiry.
The Anti-Corruption Commission is investigating prime minister Yingluck Shinawatra over a rice purchase policy.
The BBC reports the policy has been a factor in the anti-government protests that have sparked Thailand's political crisis.
The deal with China would have been the first stage of what the Thai government was hoping to be a larger shipment of rice this year.
"China lacks confidence to do business with us after the National Anti-Corruption Commission started investigations into the transparency of rice deals between Thailand and China," Commerce Minister Niwatthamrong Bunsongphaisan said, announcing the cancellation.
The rice purchase scheme, introduced by the governing Pheu Thai party, has seen the government buying crops for the past two years at prices up to 50% higher than world prices.
However, some farmers have started to protest over not receiving payment and have threatened to join anti-government demonstrations in parts of Bangkok.
