This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/world/americas/7432164.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Tortilla prices put pressure on poor Tortilla prices put pressure on poor
(about 7 hours later)
By Duncan Kennedy BBC News, Mexico CityBy Duncan Kennedy BBC News, Mexico City
Tortillas are a staple for some 40m Mexicans surviving on littleTortillas are a staple for some 40m Mexicans surviving on little
One is never enough. Fill them with meat, with beans, with rice, with nothing, but one tortilla is never enough.One is never enough. Fill them with meat, with beans, with rice, with nothing, but one tortilla is never enough.
The size of a small plate, this soft, thin, unleavened corn bread is present at nearly every Mexican meal you eat.The size of a small plate, this soft, thin, unleavened corn bread is present at nearly every Mexican meal you eat.
Few people can make do with just one of them - a good half a dozen is about average.Few people can make do with just one of them - a good half a dozen is about average.
That is, if you can afford it.That is, if you can afford it.
About 40m Mexicans live on $5 (£2.50) a day, or less.About 40m Mexicans live on $5 (£2.50) a day, or less.
More in the BBC News series: Lesotho tackles crisisCheap food era overWhat should EU leaders do?Special report: Food price crisis Tortillas are what these people live on, so they are much more than just bread. And when the price of tortillas rises, it is big news.More in the BBC News series: Lesotho tackles crisisCheap food era overWhat should EU leaders do?Special report: Food price crisis Tortillas are what these people live on, so they are much more than just bread. And when the price of tortillas rises, it is big news.
That is why a recent announcement by Mexico's National Chamber for the Tortilla and Dough Industry made such an impact.That is why a recent announcement by Mexico's National Chamber for the Tortilla and Dough Industry made such an impact.
The chamber predicted that tortilla prices would rise by about 18% in the next month because of rising costs of fuel and corn.The chamber predicted that tortilla prices would rise by about 18% in the next month because of rising costs of fuel and corn.
It said the average price for a tonne of milled corn had gone from 3,000 pesos in January to 3,650 pesos now and that those rises would have to be passed on to consumers.It said the average price for a tonne of milled corn had gone from 3,000 pesos in January to 3,650 pesos now and that those rises would have to be passed on to consumers.
In simple terms, that would mean the price of a kilogram of tortillas would go up from about 8.5 pesos (8 US cents) a kilo now to around 10 pesos a kilo in June. In simple terms, that would mean the price of a kilogram of tortillas would go up from about 8.5 pesos (80 US cents) a kilo now to around 10 pesos a kilo in June.
Protest marchesProtest marches
If you live on $5 a day, that kind of increase is a big deal - and the government knows it.If you live on $5 a day, that kind of increase is a big deal - and the government knows it.
Tens of thousands marched in protest at tortilla price rises last yearTens of thousands marched in protest at tortilla price rises last year
Last year, tens of thousands of people marched in protest at similar price rises for tortillas. People were angry and there were scuffles.Last year, tens of thousands of people marched in protest at similar price rises for tortillas. People were angry and there were scuffles.
Many blamed American corn farmers for diverting their crops away to produce bio-fuels.Many blamed American corn farmers for diverting their crops away to produce bio-fuels.
For a time the situation looked volatile.For a time the situation looked volatile.
The government stepped in to peg prices and it is making the same soothing noises now.The government stepped in to peg prices and it is making the same soothing noises now.
"My government won't remain with its arms crossed in the face of this problem," Mexico's President Felipe Calderon said recently."My government won't remain with its arms crossed in the face of this problem," Mexico's President Felipe Calderon said recently.
His economy minister, Eduardo Sojo, added that the government was working with the tortilla industry to keep a lid on prices.His economy minister, Eduardo Sojo, added that the government was working with the tortilla industry to keep a lid on prices.
"There is no price increase," he said. "It will not go up tomorrow.""There is no price increase," he said. "It will not go up tomorrow."
And, to some extent, he is right.And, to some extent, he is right.
Go to any street-corner vendor around Mexico City's central Zocolo Square and prices appear stable - for now.Go to any street-corner vendor around Mexico City's central Zocolo Square and prices appear stable - for now.
The government does not directly subsidise tortilla prices, but it offers help for transport and warehousing, which, in effect, helps keep the price at tolerable levels.The government does not directly subsidise tortilla prices, but it offers help for transport and warehousing, which, in effect, helps keep the price at tolerable levels.
Record cropRecord crop
But, with other forecasters predicting tortilla prices will shoot up by as much as 40%, to 12 pesos a kilo, the government's ability to deal with those market forces may not be so great.But, with other forecasters predicting tortilla prices will shoot up by as much as 40%, to 12 pesos a kilo, the government's ability to deal with those market forces may not be so great.
The government has tried to help keep prices at reasonable levelsThe government has tried to help keep prices at reasonable levels
That is because inflation is already at a three-year high. Growth is down in the past quarter and oil production is running at 400,000 fewer barrels than at the same time last year.That is because inflation is already at a three-year high. Growth is down in the past quarter and oil production is running at 400,000 fewer barrels than at the same time last year.
The situation has left the government's bank balance short of 100bn pesos, according to Mr Calderon.The situation has left the government's bank balance short of 100bn pesos, according to Mr Calderon.
One bright note is that Mexico is on target for a record 2008 corn crop, which would mean two good harvests in a row.One bright note is that Mexico is on target for a record 2008 corn crop, which would mean two good harvests in a row.
But it is starting from a low base.But it is starting from a low base.
Even the president has admitted that the country's ability to produce more grain is limited, because so many farmers have abandoned their fields in recent years to find better paid work in the neighbouring US.Even the president has admitted that the country's ability to produce more grain is limited, because so many farmers have abandoned their fields in recent years to find better paid work in the neighbouring US.
"For many years, developing countries, in particular Mexico, faced the problem of very high subsidies in the United States and Europe, and this drove a lot of producers out of the competition," Mr Calderon said."For many years, developing countries, in particular Mexico, faced the problem of very high subsidies in the United States and Europe, and this drove a lot of producers out of the competition," Mr Calderon said.
"This has meant that when we see this rise in world demand for food, the reaction from the supply side is not as fast.""This has meant that when we see this rise in world demand for food, the reaction from the supply side is not as fast."
Daunting realityDaunting reality
The irony is that this is happening in Mexico, the land where corn was first domesticated some 7,000 years ago.The irony is that this is happening in Mexico, the land where corn was first domesticated some 7,000 years ago.
If tortillas become too expensive for the poor, stability could be threatenedIf tortillas become too expensive for the poor, stability could be threatened
Everyone has a favourite target to blame for all this.Everyone has a favourite target to blame for all this.
Whether it is rising demand for food and fuel from India and China, or the North American Free Trade Agreement (Nafta) between Mexico and the United States, there are arguments to be made for cause and effect.Whether it is rising demand for food and fuel from India and China, or the North American Free Trade Agreement (Nafta) between Mexico and the United States, there are arguments to be made for cause and effect.
But countries like Mexico have to live with the daunting reality now, that prices of the core-of-life food so many millions rely on may soon start to rise beyond their reach.But countries like Mexico have to live with the daunting reality now, that prices of the core-of-life food so many millions rely on may soon start to rise beyond their reach.
And that could cause problems - a staple that may make a country unstable.And that could cause problems - a staple that may make a country unstable.
One tortilla may not be enough, but it may soon be all that many can afford.One tortilla may not be enough, but it may soon be all that many can afford.