Undercurrents: beneath the obvious

February 1, 2007

High tortilla prices in Mexico – Ethanol production to blame

Filed under: Ethanol,Great Lakes News — nemo @ 11:31 am

75,000 protest tortilla prices in Mexico:

Since taking office Dec. 1 … President Felipe Calderon has drawn his greatest criticism for failing to control the largest price spike in tortillas in decades. Tortillas are a staple of poor Mexicans’ diet.

The national uproar has put him in an uncomfortable position between the poor and some agribusiness industries hoping to profit from the surge in international corn prices, driven mostly by the sudden explosion of the U.S. ethanol industry.

The marchers are angry about tortilla prices that have doubled over the last year to roughly 45 cents a pound, causing hardship among the millions of poor Mexicans for whom they are a staple.

In Michigan news: “… the price of corn has doubled in the past year, and as a result, the state Director of Agriculture Mitch Irwin says every-day food items like beef and cereal will soon jump in price.

Under the 1994 North American Free Trade Agreement, Mexico used to get cheap corn imports from the US, but with more US corn being diverted into ethanol production, supply is dwindling.

See prior post: Ten things to know about ethanol

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