Us ethanol industry fuelling inflation south of the border

US ethanol industry fuelling inflation south of the border

Every week, Julia González buys two kilos of corn tortillas for her family of four. The 40 tortillas are used to make beef tacos,chicken tacos, quesadillas and deep-fried taquitos, and corn finds its way into a great many more dishes in the González household as well. Sweet atole for breakfast or dessert, pozole soup, tamales — alldishes prepared from corn.

Corn is the staple food in Mexico, Central and rural South America and these days González must pay 10 pesos (¢87) for a kilo of corn tortillas. This price is triple thenorm, a huge increase for families with modest incomes. While President Felipe Calderón’s government has tried to put a stop to soaring corn prices, the country’s poor have been hardest-hit.Rising tortilla prices have become a topic of national concern, comparable to recent government measures put in place to control drug trafficking. The impact of corn’s rising price is difficult toestimate, but there is no question that already millions of Mexicans are beginning to feel the pinch. The problem is compounded by the fact that 45% of chickens and 20% of pigs are reared on thisincreasingly-costly food source. “We have to put our chickens and pigs on a diet. Otherwise they’ll eat everything and they’ll be nothing left for humans” says a satirical writer from the Milenio newspaper,commenting on the recent spike in corn prices.

Each year, Mexico produces 21.3 million tonnes of corn of different varieties while 39 million tonnes of corn are consumed by people or as animalfeed. The 17.7 million tonne shortfall is made up mostly from US imports, the largest supplier. While the Mexican government is reluctant to accept the almost-inevitable effects of inflation, manyindustries are starting to call the alarm. Food service — which directly employs 800,000 people in 280,000 establishments across Mexico — is one such industry which is concerned. Restaurants account...