Mexican gov't opens corn quotas to tackle rising tortilla prices

The Mexican government on Friday decided to set tariff-free quotas for corn imports to offset a price hike of staple food.

According to Economy Minister Eduardo Sojo, a 450,000 ton tariff-free import quota would be opened for white corn from the United States. A 200,000 ton tariff-free quota would also be set for white and yellow corn from any country.

Tortilla prices in Mexico soared nearly 14 percent over the past year. It again jumped 25 percent over the past week, hitting average Mexicans who rely on corn as their staple diet.

Sojo said the move was made to complement corn supply in the national market, but warned that any price relief would not take place immediately.

Government officials and economists blamed speculation by traders for the price surge. They also considered increased U.S. production of ethanol from corn as part of the reason.

Mexico imports some 7-8 million tons of U.S. corn each year. Last year, it produced 22 million tons of corn, ranking fourth in the world.

It is forecasted that tortilla prices in Mexico will leap by 20-25 percent in the first quarter of 2007.

Source: Xinhua