Thread: Food prices push Mexico inflation to 3-year high

Food prices push Mexico inflation to 3-year high

By Jason Lange and Noel Randewich
REUTERS

10:31 a.m. May 8, 2008

MEXICO CITY – Spiraling world food prices pushed Mexico's inflation to a three-year high in April, reinforcing expectations the central bank will not cut interest rates to stave off the effect of a feared U.S. recession.
Mexican consumer prices rose 4.55 percent in the 12 months through April, up from 4.25 percent in March, the central bank said Thursday.

It was the highest annual inflation reading since May 2005, when it stood at 4.60 percent.
Inflation across Latin America has jumped in recent months as rapidly developing economies like India and China boost demand for food commodities and as grains are diverted to make biofuels.

Investors in recent weeks have given up expectations that Mexico's central bank could cut interest rates to counter the effect of a feared U.S. recession.

Economists now widely expect no change in interest rates this year. But they also warn that persistently high inflation may force Mexico's central bank to hike rates.

Central bankers will closely watch upcoming data for signs of a dip in Mexico's economy, which so far has done well despite the U.S. slowdown but is expected to feel the pinch this quarter.

“If that data doesn't suggest economic growth is being impacted as much as previously expected, then I think the probability of hiking rates will increase,â€

So what do you think is happening here. Do you really think our high fuel prices are going to lower our food prices. There is a wheat shortage in the world. We are using corn for ethanol not food and people are feeling the pinch in the rest of the world because of it. Ethanol can't even be used yet and it costs as much as oil by the time its processed. What a joke. Australia is in drought so their wheat supply is nil. It will be world wide.

Neal Cavuto had his segment on people buying in bulk at Costco. Full carcases to freeze the meat and dry goods. Prices are going up and it won't get any better no matter who wins the Presidency.

NAFTA is killing the local farmers in Mexico and putting them out of business so the working class people are forced to pay higher prices of imported food or locally produced food by big corporations that want big money

I'm sure inflation will drive more and more illegals to the US. Where else can they get food stamps, free medical, and all the necessities of life...courtesy of the U.S. taxpayers! Plus...they can get all they want to eat for $2.00 from the taco trucks!