The Corn Factor

31 Jan 2007

The price of tortillas, the flat corn bread that constitutes the main source of calories for many of Mexico’s poor, rose by more than 10% last year.
Last month Federal Competition Commission officials announced they were investigating claims that tortilla companies nationwide were manipulating prices and restricting supplies to boost profits.
‘If we detect monopolistic practices,’ said Eduardo Perez Motta, the commission’s director in a statement, ‘we could impose fines of up to 70m pesos.’
Under the 1994 North American Free Trade Agreement, Mexico should receive cheap corn imports from the US, but the Economy Minister Eduardo Sojo has said, that with more US corn being used for ethanol production, supply is declining.

Early in January the Mexican President Felipe Calderon promised to intervene to address the problem of the soaring price of tortillas, pledging that the government would clamp down on speculators and source cheaper suppliers of corn without imposing subsidies or price controls, which were lifted in the late 1990s.

‘We will take all the measures within reach of the federal government to avoid escalating prices,’ said Calderon, who has also told his agriculture secretary to import exta corn to alleviate the problem.

Source:
BBC
news.bbc.co.uk/2/hi/americas/

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