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Corn import tariffs lifted .

The Calderón administration opened the door Friday for a huge influx of imported corn, mostly from the United States, as part of an urgent effort to tame tortilla prices
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BY KELLY ARTHUR GARRETT
El Universal
Sábado 13 de enero de 2007

The Calderón administration opened the door Friday for a huge influx of imported corn, mostly from the United States, as part of an urgent effort to tame tortilla prices.

Economy Secretary Eduardo Sojo said he has authorized 450,000 tons of tariff-free imports of white corn from the United States, and another 200,000 from other global corn producers, such as South Africa.

Mexico, where corn was first cultivated more than 5,000 years ago, already imports U.S. corn, but primarily yellow corn used mostly for animal feed. The government is counting on a surge of imported white corn, used to make tortillas, to press down prices and discourage the speculation and hoarding that are primarily responsible for the recent inflated corn prices that are reflected in the high tortilla prices.

But nobody is expecting consumers to pay less for tortillas any time soon.

"What they´re announcing today doesn´t mean lower prices tomorrow," said Greta Villaseñor, director of the Corn Industry Business Council.

The 650,000 tons authorized Friday may be only the beginning of the administration´s import strategy.

"The Economy Secretariat will monitor market behavior and, if needed, will consider the possibility of making new emergency authorizations," Sojo said.

According to Profeco, the federal consumer protection agency, the average price nationwide for tortillas bought at traditional mom-and-pop dispensaries was just more than 9 pesos Friday, about US$0.80. Supermarket tortillas are available for considerably less, about 5.50 pesos on average, according to Profeco.

Tortillas are Mexico´s signature staple food, and the primary source of nutrition for the nation´s poor.

The recent acceleration of the nearly year-long rise in prices has grabbed the country´s attention and presented President Felipe Calderón with the first crisis of his six-week-old presidency.

Business leaders worried out loud Friday that the reportedly speculation-driven artificially high corn prices could threaten economic stability.

"If we continue along this path we could be in danger of inflation, and everybody will pay a price for that," said Business Coordinating Council President José Luis Barraza González, a strong supporter of Calderón during the 2006 campaign. "The consumption capacity and purchasing power of the most unprotected sectors would be the first to be affected."

Juan Camacho Gómez, president of the major national tortilla maker organization, warned of en masse closings of the traditional dispensaries that press out fresh tortillas. The tiny businesses can´t afford the new expensive corn flour without raising the price of their tortillas, but their customers can´t pay the higher prices.

"Raising tortilla prices will be the death of this small industry," Camacho said.

Humberto Roque Villanueva, former president of the Institutional Revolutionary Party (PRI), said Calderón and his predecessor, Vicente Fox, should have seen the crisis coming and prevented it by increasing reserves. He also wondered whether enough white corn will come from the United States to make a difference.

"It´s yellow corn that´s in demand internationally because it´s the primary material to make ethanol," Roque Villanueva said, referring to the alternative fuel. "The little (white corn) that the United State produces is mainly from contracts with snack makers and (the commercial corn products manufacturer) Maseca.

Maseca itself came in for some criticism Friday from former presidential candidate Andrés Manuel López Obrador, who accused the giant of contributing to the crisis with monopolistic practices.

"One company alone, Maseca, holds 85 percent of the cornmeal that is produced in this country," he said.

EL UNIVERSAL staff writer Juan Arvixu Arroja contributed to this report.

 
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