- Title: Mexican corn imports to rise as tortilla makers struggle amid high energy prices
- Date: 17th January 2017
- Summary: MEXICO CITY, MEXICO (JANUARY 17, 2017) (REUTERS) GENERAL VIEW OF MEN GRINDING CORN VARIOUS OF GRAIN BEING GROUND MAN WEIGHING CORN VARIOUS OF MEN WORKING WITH CORN VARIOUS OF BAGS OF CORN MEXICO CITY, MEXICO (JANUARY 16, 2017) (REUTERS) (SOUNDBITE) (Spanish) PRESIDENT OF THE NATIONAL FEDERATION OF CORN PRODUCERS, JUAN PABLO ROJAS, SAYING: "Producers will certainly stop buying fertilizers and other consumables because the cost of production per hectare has gone up between 20 up to 40 percent. The price has increased due to increasing taxes, fuel and fertilizer prices." ROJAS DURING INTERVIEW (SOUNDBITE) (Spanish) PRESIDENT OF THE NATIONAL FEDERATION OF CORN PRODUCERS, JUAN PABLO ROJAS, SAYING: "The tortilla makers which are in the suburbs, on the corner of the block and such, they are the ones that are a bit uncontrollable as far as price. We understand that as they are smaller businesses their costs also go up when the grain they use goes go up due to transport and when those who sell the flour are also raising their prices." MEXICO CITY, MEXICO (JANUARY 17, 2017) (REUTERS) VARIOUS OF EMPLOYEES MAKING TORTILLAS FROM CORN TORTILLAS BEING MADE PRICE SIGN FOR TORTILLAS VARIOUS OF TORTILLA PRODUCTION WOMAN BUYING TORTILLAS MEXICO CITY, MEXICO (JANUARY 16, 2017) (REUTERS) (SOUNDBITE) (Spanish) MANAGER OF A CORN MILL, VICTOR RODRIGUEZ, SAYING: "Corn has always had an unstable price, it goes up and down and now it has not gone down. On the contrary it has gone up considerably by the tonne and we cannot raise the price at the point of sale because we are attacked by authorities, they put pressure on us." FOOD SELLER COOKING IN MARKET (SOUNDBITE) (Spanish) FOOD SELLER, LAURA TELLEZ, SAYING: "Tortillas, flour, oil, cream, cheese, everything has gone up because of petrol. Petrol price goes up and then prices go up." MEXICO CITY, MEXICO (JANUARY 17, 2017) (REUTERS) VARIOUS OF EMPLOYEES MAKING TORTILLAS FROM CORN VARIOUS OF VENDOR SELLING TORTILLAS
- Embargoed: 31st January 2017 22:22
- Keywords: Mexico corn tortillas United States gasoline fuel imports
- Location: MEXICO CITY, MEXICO
- City: MEXICO CITY, MEXICO
- Country: Mexico
- Topics: Government/Politics
- Reuters ID: LVA0015ZH030J
- Aspect Ratio: 16:9
- Story Text:Mexican demand for yellow corn imports from the United States will rise at least by a fifth next season as domestic production costs rise and output dips, the president of the country's top corn farmer federation said in an interview.
Production costs are rising due to a double-digit fuel price spike that took effect on January 1 as well as a weakening local currency, and both factors will put upward pressure this year on the cost of Mexico's food staple tortillas, said Juan Pablo Rojas, president of national corn farmer federation CNPAMM.
He added that this will see producers cut back on fertilizers and other items.
"Producers will certainly stop buying fertilizers and other consumables because the cost of production per hectare has gone up between 20 up to 40 percent. The price has increased due to increasing taxes, fuel and fertilizer prices," Rojas told Reuters.
Imports of yellow corn, mostly used to feed livestock, are likely to jump to between 16.8 and 19.2 million tonnes during the upcoming 2017/2018 season, which begins in April.
Imports during the current 2016/2017 season are likely to total between 14 and 16 million tonnes, said Rojas.
He reported production costs are likely to spike as much as 40 over the next few weeks and extend into next season, which will mostly affect consumers.
Speaking to Reuters, Rojas said the local tortilla sellers will be most impacted to price movements.
"The tortilla makers which are in the suburbs, on the corner of the block and such, they are the ones that are a bit uncontrollable as far as price. We understand that as they are smaller businesses their costs also go up when the grain they use goes go up due to transport and when those who sell the flour are also raising their prices," he added.
Despite a high-profile meeting convened by President Enrique Pena Nieto last week with business and union leaders pledging to limit rising prices for basics like tortillas, Rojas is not optimistic.
The manager of a Mexico City corn mill, Victor Rodriguez, said mills have felt pressure to keep prices down.
"Corn has always had an unstable price, it goes up and down and now it has not gone down. On the contrary it has gone up considerably by the tonne and we cannot raise the price at the point of sale because we are attacked by authorities, they put pressure on us," Rodriguez said.
Rojas added that tortilla prices are likely to rise nationwide by an average of about 7 percent to reach 14 pesos ($0.65) per kilo this year, but could spike more than 40 percent higher to reach 20 pesos per kilo in southern parts of the country, which tend to be poorer.
Local food seller Laura Tellez said she has already seen prices rise.
"Tortillas, flour, oil, cream, cheese, everything has gone up because of petrol. Petrol price goes up and then prices go up," she said.
An end to NAFTA, the free trade accord between Mexico, the United States and Canada that U.S. President-elect Donald Trump has promised to scrap entirely or re-negotiate, could also spell change for Mexican corn.
Nafta is widely blamed in Mexico for flooding the local market with cheap, subsidized yellow corn. - Copyright Holder: REUTERS
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