Thread: Mexican tortilla prices jump

Mexican tortilla prices jump
14% increase in a year hits country's poor

January 14, 2007
BY PETER ORSI
MEXICO CITY -- Soaring international demand for corn has caused a spike in prices for Mexico's humble tortilla, hitting the poor and forcing President Felipe Calderon's business-friendly government into an uncomfortable confrontation with powerful monopolies.



Tortilla prices jumped nearly 14 percent in the last year, which Gov. Guillermo Ortiz of Mexico's Central Bank called ''unjustifiable'' in a country where inflation ran about 4 percent. Ortiz pinned the blame on companies monopolizing the market and blocking competition.

''We clearly have a problem of speculation,'' he said.

The government and economists also blame increased U.S. production of ethanol from corn as an alternative to oil.

''This is direct evidence of the way globalization is affecting all walks of life in Mexico and all over the world,'' said David Barkin, an economics professor at the Xochimilco campus of the Autonomous Metropolitan University in Mexico City.

On Friday, Economy Minister Eduardo Sojo said the government had authorized duty-free imports of 650,000 metric tons of corn to drive down tortilla prices. But he warned that any price relief would not be immediate, with the corn imports hitting the Mexican market in February.


Price manipulation alleged
Efrain Garcia, president of the National Confederation of Agricultural Corn Producers, said growers would not oppose the increased imports. "It's very clear to us, the producers, that [Mexico] needs a cheap tortilla,'' he said.
The federal government's antitrust watchdog said last week it was investigating allegations that companies were manipulating corn prices and making deals to limit the supply of corn to boost prices of tortillas.

Big retailers, mostly supermarkets, have kept tortilla prices steady around 55 cents a kilogram, but in Mexico City, some shops are selling them for 90 cents a kilogram, up from 73 cents.

For low-income Mexicans, who earn about $18 a day on average, the increasing prices have hit hard. According to the government, about half of the country's 107 million citizens live in poverty.

''When there isn't enough money to buy meat, you do without,'' Bonifacia Ysidro said as she wrapped an embroidered towel around a foot-high stack of tortillas to cart home. Tortillas, she added, ''you can't do without.''

AP

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

http://www.suntimes.com/news/world/2097 ... 14.article

Don't these women know how to make tortillas?

Those women can thank NAFTA for the trotilla shortage!

Dixie

For low-income Mexicans, who earn about $18 a day on average

With IA's sending home $300 a month on average, where is the gain? If the primary breadwinner is gone, The whole thing seems like a wash to me. G.M. is paying 3.50 an hour in Mexico, which is almost 600 a month. From what I've read 350-400 a month is the average middle class income in Mexico. How long does it take to actually come out ahead, when you consider smuggling fees, etc.? Most of these people don't have enough education to work in a factory, which might account for some of it. I think the biggest draw is not the pay, but the BENEFITS!

The government and economists also blame increased U.S. production of ethanol from corn as an alternative to oil.

Sounds like an easy fix to me...give us oil at a reasonable price, and we'll hand over some cheap tortillas.