Mexico City, Jan 12 - With the price of tortillas in Mexico City soaring 25 percent in a week, Mexico said on Friday it was setting tariff-free quotas for corn imports to make the staple food made from the grain more affordable.
Mexico will open a 450,000 tonne tariff-free import quota for white corn from the United States, Economy Minister Eduardo Sojo told reporters.
He also said Mexico was setting a 200,000 tonne tariff-free quota for white and yellow corn from any country.
"The two measures are meant to complement the supply of corn in the national market, encouraging a reduction of prices in the corn-tortilla chain," Sojo said.
In Mexico City, a kilogram of tortillas cost about 10 pesos (91 cents), 25 percent more now than a week ago. Surging tortilla prices have hurt millions of Mexican households that serve the flat corn bread with almost every meal.
Sojo did not say when the quotas would take effect. He said Mexico could open further quotas later in the year if the situation required.
Some economists worry that growing demand for corn, increasingly used to create ethanol fuel in the United States, could make it more difficult to control inflation in Mexico.
Mexican government officials say the recent leap in tortilla prices has as much to do with speculation and hoarding by unscrupulous traders as with high U.S. prices.
Mexico imports between 7 million and 8 million tonnes of mostly U.S. yellow corn each year. That corn is used for animal feed and industrial purposes, but high prices have had a knock-on effect on white corn used to make tortillas.
Local farmers are normally able to cover most of Mexico's demand for white corn.
Agriculture Minister Alberto Cardenas said Mexico would try to boost its own yellow corn production by 1 million hectares over the next six years and improve productivity to reduce dependence on imports.
Export sales of the new crop of U.S. corn to be harvested this fall are nearly six times higher than the five-year average. Mexico has been the biggest buyer of new-crop corn with 320,000 tonnes.
Cardenas said Mexico produced 22 million tonnes of corn last year, making it the world's No. 4 corn producer.