Tuesday, February 13, 2007
Mexican Tortilla Crisis
President Felipe Calerdon of Mexico has come under intense pressure because of a recent march on Mexico's capital by tens of thousands of people protesting a recent surge in tortilla prices. The cause for the increase in prices is because of the rising U.S. demand for ethanol that has sent the corn prices to their highest level in a decade. Corn tortilla prices rose as high as 15 pesos ($1.36) for a kilogram (2.2 pounds). Mexico imports corn from the United States to top up its domestic production. Calerdon responded to the protest by persuading producers, makers, and retailers to make sure their tortillas sold at no more than 8.50 pesos a kilo, but the local media has said some vendors are still charging up to 12 pesos a kilo. Before the crisis they sold at about 5 pesos a kilo. For half of Mexico that lives on $5 a day or less this is a major crisis. Calderon's leftist election rival, Andres Manuel Lopez Obrador joined the recent march and is using the tortilla crisis to attack the government. This is after the highly contested presidential election between the two which ended when it was thrown out of court by Mexico's top election court. This tortilla crisis is going to hurt Mexico's economy because it is tough for the consumers to afford the corn tortilla which is a national food staple. Businesses are losing money and Mexico will still continue to have trouble trying to supply the U.S. demand for ethanol.
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6 comments:
It's interesting to see what problems we are having from introducing new forms of gasoline. People say being less dependent on oil is a good thing, but clearly switching to ethanol has it's negatives as well. It will be interesting to see new developments in farming that must arise to help combat the mass increase of ethanol usage. Finally i think it's insane the way our demand for a product can cripple the economy of a whole other country.
It surprises me to see how much our economy effects everyone around us. Demand for one commodity here brings another economy to it's knees. I knew that every country effects each other and feel that we need to be careful in trying to fix our own economy because we could easily destroy others around us.
I'm not surprised to see that the United States is causeing economic problems in other countries. Personally I believe that the U.S. is more concerned inward at its own problems that the country as a whole does not look at the effects it might have on the world. Obviously by trying to switch from gasoline to ethanol it is have a significant impact on other countries economies.
I am slightly shocked to see that the U.S's decisions are not only effecting our own country but other countries surrounding us. I will be curious as to whether or not this tortilla issue will effect the United States use of ethanol.
This is very interesting topic. I had no Idea that some thing like this could happen to another country by the demand for a product skyrocketing. It will be interesting to see how it will be resolved.
hmm... one solutions is the total annexation of Mexico over a period of a few years..that would bolster are industry after a period of initial decline and help them raise standards of living. but thats unrealistic. I'd rather merge with Canada anyway.
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