Mexico’s Calderon Moves to Defuse Anger Over Tortilla Prices
MEXICO CITY _ President Felipe Calderon sought to defuse a political crisis over the rising cost of corn tortillas Thursday by reaching an agreement with producers to adhere to voluntary price controls on the Mexican staple.
Calderon announced the agreement in a ceremony at the presidential residence, Los Pinos, and warned that anti-speculation laws would be enforced.
“The objective of this agreement … is to immediately stabilize the price of corn and tortillas in order to directly protect the budget of Mexican families and (guarantee) our economy’s continued march forward,” Calderon said.
“We will not tolerate speculators or those who seek to monopolize,” he said. “We are going to apply the law firmly to punish those who would take advantage of the necessity of the people.”
The crisis was distracting the public from Calderon’s announcements of new social programs to fight poverty, political analysts said. He has been in office since Dec. 1.
During presidential trips outside Mexico City, angry homemakers have intercepted Calderon to complain about tortilla prices. Tortilla prices were controlled and raw materials subsidized until the end of the 1990s, reflecting the political sensitivity of the issue.
The price of tortillas has been slowly rising over the last year, parallel to the price of corn, but tortilla prices surged earlier this month, especially at small neighborhood tortilla makers where many of Mexico’s poor buy them fresh each day.
Under the Thursday agreement, the maximum price for a kilogram of tortillas (2.2 pounds) is now 8.5 pesos, or 78 cents.
That price corresponds to pre-packaged corn tortillas sold by Mexico’s baking giant, Bimbo, under the brand name Milpa Real, sold at 300,000 large and small stores throughout the country.
The maximum price also applies to 5,000 small producers in neighborhood tortillerias.
Supermarket chains like Wal-Mart agreed to keep prices below 6 pesos per kilo, or about 55 cents, at their more than 1,900 locations.
Similar voluntary price agreements were reached on the raw materials for tortilla production, such as white corn and corn flour.
Opposition legislators criticized the tortilla price agreement, saying that it left prices too high and lasts for only three months.
Rising international prices for corn had caused tortilla prices to rise unevenly all over Mexico, with many smaller producers raising prices to 10 pesos per kilo (about 93 cents). In a few cases, prices along the U.S.-Mexico border were reported as high as 18 pesos, or $1.70.
Analysts have attributed the global rise in corn prices to growing demand for the grain in order to produce ethanol, which partially replaces high-priced gasoline.
Economy Minister Eduardo Sojo said the 13-point agreement includes government permits for the import of an additional 750,000 tons of corn that would be free from existing tariffs. Much of that corn, which is for human consumption, comes from the United States and is controlled by the North American Free Trade Agreement.
The accord also allows the importation of up to 2.85 million tons of corn, tariff-free, for animal consumption in order to guarantee supplies for the chicken, pork and beef industries.
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