Mexico Buys Corn Futures To Ensure Tortilla Prices Remain Flat

Mexico City ? In 2007, massive impromptu street protests threatened the popularity of Mexican President Felipe Caldern. But it was not drug violence or kidnappings that prompted the outcry. It was the price of corn tortillas.

Now the Caldern administration faces a repeat scenario. High corn prices are threatening to put Mexico?s staple out of reach for those who depend on it most for the bulk of their daily caloric intake.

Earlier this month, tortilla makers said that prices could rise by 50 percent. An increase of the same amount led to the so-called ?tortilla riots? of 2007. At that time, the Monitor attended marches with protesters angrily gripping onto cobs of corn and chanting, ?Without corn, we aren?t a country.?

The government blasted the price-increase threats and set off on an inspection spree to make sure tortilla shops have not raised their prices. But most unusual ?and perhaps a sign of how important the image of affordable tortillas are in a country that once worshipped corn gods? is the announcement it has purchased a form of corn insurance to safeguard prices into next year, reported the Financial Times.

The futures, announced by Economy Minister Bruno Ferrari, should allay consumer concerns, he says. ?The prices are guaranteed,? he said to the local media. ?The supply necessary until the third quarter of next year is covered.?

Concerns about tortilla prices sparked after the president of the National Tortilla Industry Union, Lorenzo Mejia, announced in a press release earlier this month that prices for a kilogram (2.2 pounds) of tortilla could rise to 12 pesos, or just under one dollar, and then continue to rise. The national average is currently at about 9.88 pesos. In Mexico City, it is 8.65 pesos.

Read the full Yahoo/Christian Science Monitor article here.