Mexico Grumbles over Rise in Tortilla Prices

Tortillas are a Mexican staple. But in recent weeks a dramatic increase in the cost of tortillas has caused an outcry. In some areas, the purchase price is up by nearly 50 percent.

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RENEE MONTAGNE, host:

We go now to Mexico, where the price of tortillas has risen dramatically in recent weeks. And the price hike, which in some parts of the country has reached more than 50 percent, has caused an outcry.

NPR's Lourdes Garcia-Navarro reports from Mexico City.

LOURDES GARCIA-NAVARRO: This wasn't your usual Mexican government press conference. The place was packed, and the press was baying. And it seemed that everyone on the podium was pointing fingers at everything but themselves. The secretary of social development, Maria Beatriz Zavala, was quick to distance President Felipe Calderon's team from blame.

Ms. MARIA BEATRIZ ZAVALA (Secretary of Social Development, Mexico): (Spanish spoken)

GARCIA-NAVARRO: It's very important to signal that the price of these products, she said, are not in any way controlled by the state or by the government. The problem, she said: growing U.S. demand for yellow corn-based ethanol, which has affected the price of white corn south of the border with which tortillas are made.

Efrain Garcia, president of the National Confederation of Corn Producers, was also eager to say that it was not their fault that there was an apparent corn shortage. He made a swipe at the North America Free Trade Agreement, intimating that it was the root cause of the crisis because of the competition with subsidized American corn.

Mr. EFRAIN GARCIA (President, National Confederation of Corn Producers): (Spanish spoken)

GARCIA-NAVARRO: We need agriculture that's protected in Mexico. We need help. Let us protect our national harvest, he said.

Mexico has shed nearly 30 percent of its farm jobs since NAFTA was implemented, sending many people from the countryside illegally north.

There was still another explanation for this tortilla crisis. The Federal Competition Commission's director, Eduardo Perez Motta, said his agency was going to investigate monopolistic practices that could have led to price gouging. And indeed, one company, Gruma, holds an estimated 70 percent of the Mexican market for tortillas and cornmeal after cornering the business in the 1990s with the complicity of the Mexican government.

What's happening is important, because Mexicans eat an estimated 10 tortillas a day.

Unidentified Female: (Spanish spoken)

GARCIA-NAVARRO: At a local tortillaria, hot, fresh tortillas are spewed out of a small machine that takes the dough and automatically flattens and bakes it. Large stacks are then wrapped up in paper and sold to waiting customers.

Felipe Alindo(ph) has been working at this neighborhood shop for 50 years.

Mr. FELIPE ALINDO (Employee, Tortilla Shop): (Spanish spoken)

GARCIA-NAVARRO: He says the clients are expressing their worries to me, because, of course, I'm the only one they see every day. I tell them, he says, I have to put up the price, but I've been doing it a little at a time.

Mr. ALINDO: (Spanish spoken)

GARCIA-NAVARRO: The good news is that the high price of corn will mean that more will be planted, and fields that lay fallow and farmers that left agriculture could come back.

Still, Mexico also announced new corn import quotas, totaling 650,000 tons to try and lower costs. The government has said it will import cheap corn from anywhere to alleviate the situation, which may undercut the bonanza for producers.

And small tortilla factories like this one are feeling the head-on competition from mega stores like Wal-Mart, the largest private employer in Mexico. It has kept the price of tortillas low after a deal with the Mexican government. Alindo is worried that something like this could leave small producers like him in trouble.

Mr. ALINDO: (Spanish spoken)

GARCIA-NAVARRO: It's unfair competition, he says.

Still, Sandra Velaskas(ph) - a client at his store - and her three children, are more concerned about getting their share of tortillas every day.

Ms. SANDRA VELASKAS: (Spanish spoken)

GARCIA-NAVARRO: We have a budget, and if they keep raising the price, I won't have enough to buy the other things I need, she says. Other things can be sacrificed, but no matter how high the price goes, tortillas, she said, will always be on her shopping list.

Lourdes Garcia-Navarro, NPR News, Mexico City.

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