To the People

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Thursday, January 18, 2007

Mexico Introduces Price Controls to Curb Tortilla Speculation

High gas prices have increased demand for ethanol. Demand for ethanol has made corn more attractive as a fuel and, consequently, less attractive as a food.

The result? Rising tortilla prices in Mexico that the new "conservative" president there has decided to meet with populist rhetoric and price controls.
President Felipe Calderon signed an accord with businesses on Thursday to curb soaring tortilla prices and protect Mexico's poor from speculative sellers and a surge in the cost of corn driven by the U.S. ethanol industry. The corn tortilla is the basic staple of the Mexican diet and is especially crucial for the poor. The accord limits tortilla prices to 8.50 pesos ($0.78) per kilogram and threatens to use existing laws to achieve prison sentences of up to 10 years for company officials found hoarding corn. Some stores have been selling tortillas for as much as 10 pesos ($0.91) per kilogram.
More here, y tambien mas aqui.

Of course, as some predicted, the price of a barrel of oil is already going through the floor. Which makes Mexico's price controls -- like similar attempts -- even more unnecessary.

In other news... I recently started making my own tortilla chips by frying up fresh, store-bought corn tortillas in corn oil. I had no idea I was such a gourmet, or a player in such international corntrigue.