Mexico Sets 50% Tariff on White Corn Exports in Effort to Tame Tortilla-Price Rise

(Bloomberg) — Mexico introduced a temporary 50% tariff on exports of white corn used in basic food as it seeks to contain a spike in the price of tortillas, one of the country’s staples.

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According to President Andres Manuel Lopez Obrador’s Monday decree, the duty will remain in effect until June 30 and is intended to ensure that the country’s local production continues to be available and that white corn prices stay stable. The tariffs on imports of grain for human consumption will not be applied.

White corn is a key source of calories in the diet of Mexican consumers, representing 89% of the country’s grain production, the decree said. It stated that Mexicans consume an average of 330 kgs of white corn annually.

Mexico is facing difficulties in containing a surge in food prices. Inflation reached 8.7% in the third quarter. It was the highest level since more than 20 years. Last year, the Lopez Obrador administration reached an agreement with some of the country’s top businesses to contain the cost of basic goods by removing import barriers and red tape.

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According to Grupo Consultor de Mercados Agricolas research firm specializing in agriculture, Mexico exported 241,000 tonnes of white corn between 2022 and 2023. The estimated value was $97 million. Mexico produces most of its grain for domestic consumption so it will have little impact on shipments.

The new tariff comes at a time Mexico and the US are fighting over the Latin American government’s proposal to ban imports of genetically-modified yellow corn for livestock feed by early next year, which Mexican politicians argue could be damaging to health. Mexico’s Finance Ministry and the US Trade Representative’s office did not respond to comment requests on the decision.

Continue reading: AMLO warns US about Spat over GMO Corn.

Eric Martin provides assistance.

(Update with data about corn exports and comments from the government in fifth and sixth paragraphs.

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