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| Caribbean-Latin America |
| Mexico At Risk For Tortilla Unrest |
| 2007-01-19 |
| President Felipe Calderon signed an accord with businesses on Thursday to curb soaring tortilla prices and protect Mexico's poor from speculative sellers and a surge in the cost of corn driven by the U.S. ethanol industry. The corn tortilla is the basic staple of the Mexican diet and is especially crucial for the poor. The accord limits tortilla prices to 8.50 pesos ($0.78) per kilogram and threatens to use existing laws to achieve prison sentences of up to 10 years for company officials found hoarding corn. Some stores have been selling tortillas for as much as 10 pesos ($0.91) per kilogram. It also raises quotas for duty-free corn imports to 750,000 metric tons (826,733 U.S. tons), most of which will come from the United States. The measure is to be reviewed for possible modifications on April 30. "The unjustifiable price rise of this product threatens the economy of millions of families," Calderon said. "We won't tolerate speculators or monopolists. We will apply the law with firmness and punish those who take advantage of people's need." The rise in tortilla prices has been one of the first major challenges for the conservative who took office in December, putting him in an uncomfortable position between the interests of business and those of the poor. Tortilla prices rose by 14 percent in 2006, more than three times the inflation rate, and they have continued to surge in the first weeks of 2007. The rise is partly due to U.S. ethanol plants gobbling corn supplies and pushing prices as high as $3.40 a bushel, the highest in more than a decade. But Calderon also blames price gouging by Mexican middlemen who grind corn into flour and sell it to thousands of tortilla sellers across the nation. "The increases in the international corn market do not justify the tortilla hikes in this country in the last weeks," Calderon said. Under the accord, corn flour will be limited to 5 pesos ($0.46) per kilogram and corn itself will not exceed 3.5 pesos ($0.32) per kilogram, which is about the current market price. The agreement was signed by Mexico's major supermarket chains and bakers, including the world's largest tortilla maker, Monterrey, Mexico-based Gruma SA. It was also signed by associations for thousands of independent tortilla sellers. Calderon did not specify how the prices would be enforced on vendors. Lawmakers of the Democratic Revolution Party of leftist Andres Manuel Lopez Obrador had demanded the president impose price controls. Lopez Obrador, who narrowly loss the July election to Calderon, has seized the opportunity to blame the new government for deepening the misery of the poor. Weirdly enough, the price of torillas in Mexico makes governments rise and fall. Either a sudden spike in price or a major drop in demand could result in civil unrest. |
| Posted by:Anonymoose |
| #15 "Mexico At Risk For Tortilla Unrest" Where else but at Rantburg could you find that headline? Tortilla unrest? *snort* |
| Posted by: Barbara Skolaut 2007-01-19 23:55 |
| #14 bigjim-ky, they don't. But they *do* care about their jobs and keeping their pretty little heads on their pretty little necks.... |
| Posted by: Swamp Blondie 2007-01-19 23:52 |
| #13 Goes to the very soul + identity of the Nation + locals - its akin to telling Frenchies Wine + Escargots, or for Germans Sauerkraut + Sausages, ...etal. cultures is now forbidden. Telling the Frenchies they can't surrender, or the Germans they can't attack - its just not done. |
| Posted by: JosephMendiola 2007-01-19 23:45 |
| #12 Look for the drug runners into the US to grab a back pack full of corn. That will help pay the transport cost and sure beats dead-heading!!! |
| Posted by: USN, ret. 2007-01-19 23:26 |
| #11 Since when does the Mexican govt. give a rat's ass about the people's needs? |
| Posted by: bigjim-ky 2007-01-19 18:15 |
| #10 Because, DoDo, that would cut against the economic interests of the 40 Families, and no Mexican politician will do that - end of the graft if they do. |
| Posted by: Shieldwolf 2007-01-19 18:14 |
| #9 Interesting to note that none of the proposed solutions involved educating the population and reforming the economic and legal systems so that people could make a decent living and afford to buy food at market prices. |
| Posted by: DoDo 2007-01-19 18:05 |
| #8 We will apply the law with firmness and punish those who take advantage of people's need. Isn't that precisely the opposite of what Adam Smith would describe as leading to the Wealth of Nations? And this is the more conservative candidate who won the election. And it's all the fault of gringo farmers? PUHLEEEEEEEEEEEZ |
| Posted by: Grack Whaitle3696 2007-01-19 16:58 |
| #7 I prefer harina (wheat) tortillas. Most of the campesinos, though, do indeed prefer the maiz (corn) variety. |
| Posted by: borgboy 2007-01-19 16:55 |
| #6 A boon for farmers, ed, but for people like me feeding livestock the higher price for feed will drive up the price for dead animal flesh at the grocery store. I don't particulary like subsidizing the ethanol industry. |
| Posted by: Deacon Blues 2007-01-19 16:08 |
| #5 I like the creative way that they got to blame at least some of it on America. Bravo! |
| Posted by: Swamp Blondie 2007-01-19 15:24 |
| #4 Maybe they should institute a stratetic tortilla reserve for the tough times when corn prices go high. |
| Posted by: rjschwarz 2007-01-19 15:03 |
| #3 Drat it, Darth Vader had my exact suggestion! |
| Posted by: Excalibur 2007-01-19 14:33 |
| #2 U.S. ethanol plants use 20% of the total corn crop. 25% next year at current trends. Great boon for farmers. Price has risen from a little over $2/bushel Jan. 2006 to $4. |
| Posted by: ed 2007-01-19 14:09 |
| #1 Then let them eat sopapias! |
| Posted by: DarthVader 2007-01-19 13:59 |