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.
(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.
The duty, which will be in place through June 30, seeks to guarantee that local production remains in the country and that white corn prices stabilize, according to the decree signed by President Andres Manuel Lopez Obrador and published Monday. Imports of the grain used for human consumption will be exempted of tariffs.
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. On average, Mexicans consume more than 330 kilograms of white corn per person annually, it said.
Mexico is struggling to contain a spike in food prices that led to inflation reaching 8.7% during the third quarter, the highest level in more than two decades. 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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Mexico exported about 241,000 tons of white corn in 2022, with an estimated value of $97 million, according to government data cited by Grupo Consultor de Mercados Agricolas, a research firm focused on the agriculture business. The vast majority of the grain produced in Mexico is used for local consumption, so the measure will have limited 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.
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–With assistance from Eric Martin.
(Update with data on corn exports and government comment in fifth and sixth paragraphs.)
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