Higher maize prices lead to tortilla crisis in Mexico

By Franz Smets Jan 15, 2007, 12:47 GMT

Mexico City - Rising maize prices on world markets over the last few months have had worrying consequences for Mexico with the country's staple, the maize tortilla, becoming considerably more expensive.

Mexicans now pay up to 15 pesos (1.42 dollars) for one kilogram of the thin maize flat bread, almost twice as much as previously.

The left-wing opposition has lost no time in organizing protests against the acting government, which has been in place since last December.

President Calderon meanwhile has announced measures to attempt to bring prices back to a realistic level, including the importation of 650,000 tons of duty-free maize from the United States.

In Mexico, when a town or a particular industry suffers an economic blow, only those directly affected usually take notice. However, when tortilla prices increase, the whole country becomes jittery.

'For many Mexicans, the tortilla is a question of life and death,' journalist Manuel Janregui writes in the Reforma newspaper. The state must turn towards those who have not made progress without compromising economic rules, he says.

Whether the government will keep this warning in mind, remains to be seen.

Last Friday, after 200 housewives and followers of leftist opposition leader Andres Manuel Lopez Obrador took to the streets in protest against tortilla prices, the government reacted by announcing more imports of duty-free maize from the US.

These measures are intended to provide relief for those hardest hit and help keep prices down while maize remains scarce.

It is proposed that higher production levels should also be stimulated.

The national maize authority called on the Mexican government to build up reserves so that Mexico would be more independent of the ups and downs of world markets.

The maize-tortilla chain should also be monitored by the state so that the intermediary trade could be kept under closer control.

Therefore, expert appeals against the use of subsidies and price controls are falling largely on deaf ears and it seems likely that the rules of free market economics will soon be lifted for the Mexican tortilla.

The opposition are currently organizing a 'crusade in defence of the tortilla' with marches, demonstrations and other types of action to take place in the coming weeks.

For Mexicans, tortilla is a staple, as bread is in Germany or pasta in Italy. It is a substitute for cutlery and a plate since meat, cheese, beans, spinach or ham are placed straight onto it.

Every day, 104 million Mexicans consume over 300 million tortillas. Many people in this poor and underdeveloped country have little else to eat.

Mexico produces 20 million tons of maize every year, 1.3 million tons of this is yellow and the rest is white, which should be sufficient for consumption demand in Mexico.

However, according to the business newspaper El Financiero, large quantities of maize are used for animal feed, particularly for chicken feed.

Rising world market maize prices, with an increase from 2.4 to 3.5 dollars per bushel (35 litres) have led to panic-buying within the agricultural sector.