MEXICO: After days of protests at the rising price of tortillas, Mexican government announces price control agreement but protesters say the move isn't enough

After days of protest spurred by the rising price of tortillas, a Mexican dietary staple, President Felipe Calderon announces that the government has reached an agreement with producers and retailers to limit the price of the staple. But protesters say the move is not enough. Mexico 's government struck a deal with producers and retailers on Thursday (January 18) to reverse a surge in the price of tortillas that has pushed up inflation. "The purpose of this agreement and its 13 concrete points is to stabilise as soon as possible the price of corn and tortillas to protect the pocketbook of Mexican families and for our economy to continue doing well," said President Felipe Calderon at the tortilla accord signing ceremony at the Los Pinos presidential palace. Tortillas are a staple of the Mexican diet and the recent price increases have put Calderon's conservative new government under pressure. Mexican Economy Minister Eduardo Sojo established the conditions of the agreement, focusing first in a price control for corn and corn flour. "To guarantee the popular supply of maize with a public selling price beneath the 3 pesos with 50 cents per kilogram (US 32 cents) and the corn flour with a selling public price beneath the 5 pesos (US 50 cents) per kilogram," he said. Sojo said corn flour producers, such as market heavyweight Gruma , agreed to limit the price of their product to 5 pesos (46 cents) per kilo. Convenience stores and supermarkets, including Wal-Mart de Mexico , agreed to cap the price of tortillas at 6 pesos per kilo in their stores and Mexico 's Bimbo , the world's No. 3 bread maker, will reduce the retail price of its corn tortillas to no more than 8.50 pesos a kilo. But protesters who gathered outside the taxation ministry in Mexico City said the government's move wasn't enough. "We are sick and tired of all his (Felipe Calderon's) lies, of all the price increases that are occurring, lie after lie," said protester Graciela Bello Vega. "He said that when he became president, he would lower the price of gas. And what was the first thing he did? Increase them and that unleashes terrible price increases." Combined with increases for other basic foods, the sharp rise in tortilla prices has pushed inflation above the central bank's target range of 2 percent to 4 percent. The protests over domestic prices reveals the strong criticism Calderon still faces at home. Calderon won the 2006 election with a thin margin of victory over leftist Andres Manuel Lopez Obrador, who still faces widespread support among the lower and middle classes. Tortillas are traditionally made of corn and are typically served alongside a meal like bread. They can be fried or baked and are also used in many Mexican meals such as enchiladas, tacos and quesadillas. Prices for the thin corn patties have rocketed in January, climbing 25 percent to around 10 pesos a kilo in Mexico City and even more in other parts of the country. Mexicans consume 300 million tortillas daily and the staple provides the majority of calories for the nation's poor. They are what pasta is to Italy, what rice is to China. latin/jrc

ITN Source | January 19, 2007

Tags:. .tired. .rocketed. .rice. .retailers. .ministry