Soaring Mexican tortilla prices hit struggling Mexican families | Economic News
Mexico City, Mexico – For 69-year-old Maria Eugenia Aguilera, her weekly store received an annoying sticker shock last year.
She said that the prices of basic staple foods such as tortillas have “suddenly” rise-tortillas are the tortillas that can be found on tables all over Mexico.
Prices have risen so frequently that Aguilera, who lives on the outskirts of Mexico City, no longer buys at her local grocery store. She traveled further afield to Centro de Abastos, the central food market that serves most of the country, where her pesos are more cost-effective.
“My daughters and I went there on a trip together and sent our money together,” she told Al Jazeera. “We can get more in this way.”
Before the pandemic, Aguilera said she paid 13-14 pesos (US$0.65 to US$0.70) for a kilogram of tortillas. Now she is lucky to find them for less than 20 pesos ($1.00).
Ordinary people across Mexico are feeling these price pressures.
According to the National Consumer Price Index, in the first two weeks of July, the price of one kilogram of tortillas rose 13.5% from the same period last year, which was the largest increase since March 2012. In Mexico City, the price of tortillas rose from 14.47 pesos to 20 pesos.
Since the beginning of the pandemic in February 2020, the prices of other staple foods such as tomatoes and chicken have also risen-squeezing family budgets.
Although the government of President Andrés Manuel López Obrador raised the legal minimum wage by 15% in January, many families are still struggling to make ends meet. Pay for food, housing, electricity, and natural gas—especially those households that have not recovered. As the economy recovers, the financial foundation of the pandemic.
“Many people near me are starving,” said Aguilera, whose brother died of COVID-19 and is now helping to support his family.
When Al Jazeera caught up with the matriarch outside Mexico City General Hospital (the city’s large central public hospital), she was waiting for her 22-year-old granddaughter who was battling uterine cancer.
Due to the continuing lack of anti-cancer drugs in Mexico, the cost of her granddaughter’s treatment has increased the financial burden of the Aguilera family.
Speculators exacerbate suffering
As economies around the world lifted pandemic restrictions, global food prices have soared this year, creating a bottleneck in the supply chain.
But this pain-more and more poor families are feeling that more and more income is used to maintain food on the table-speculators have been intensified by raising corn prices, said Rúben Montalvo Morales, National General Administration, National Corn Meal And the Tortilla Industry Chamber of Commerce.
“People who buy our products [tortilla] Most are the people with the least resources, and this is the food they eat the most,” he told Al Jazeera English.
To help control inflation and curb expectations that prices may continue to rise, the Bank of Mexico raised interest rates by 25 percentage points last month. But this remedy will have an adverse effect, because higher borrowing costs will cool economic activity.
Antonio Mendoza, a financial analyst in Mexico City, said he believes the central bank made the right decision.
“The central bank can reduce the threat of inflation, and in this case, it is indeed reducing this risk,” he told Al Jazeera.
Recognizing that the price of tortillas is the main economic barometer for most Mexicans, President López Obrador earlier this month proposed the idea of ??easing tariffs on imported corn.
“If the economy performs well, this must be reflected in the price of tortillas,” the president said.
In the latest “World Economic Outlook”, the International Monetary Fund has substantially increased its economic growth forecasts for Mexico. Due to the stronger-than-expected performance in the first quarter and the positive spillover effects brought about by the reopening of the US economy, the International Monetary Fund now expects the Mexican economy to grow by 6.3% this year, compared with 1.6% in April.
Given the better-than-expected rebound, Montalvo believes that it is time to take more aggressive government action to reduce tortilla prices.
“I think if the federal government obtains the supply of white corn and sells it directly to the corn flour and tortilla industries to stop price fraud, it will have the greatest impact,” he said.
Financial analyst Mendoza pointed out that the economy has also benefited from the recovery of remittances from citizens working in the United States. These tailwinds, coupled with the government being “strong enough to reduce the burden on international investors”, prompted Mexico to consider “more real investment…because we not only hope to grow for a few months, but also for the next few years” .
But before the price rises and the pressure on the family tortilla budget eases, Aguilera said that she will do everything she can to help others and rely on her family and God to tide over the difficulties.
“The government did nothing,” she said. “Some husbands and fathers no longer have jobs, and some can’t afford gas bills… If we don’t help each other, no one will.”