October 1,
2007
Mexican Consumers Hit Hard with Price Increases
Frontera NorteSur
Starting with
tortilla price hikes, Mexican consumers have been slammed with escalating costs for necessities in 2007. New statistics from
the Ministry of Economy, and the Attorney General for Consumer Protection, report that prices for 43 commodities included
in the basic consumer basket jumped by 34.17 percent between December 2006 and September 15, 2007.
The new numbers
mean that the basic basket inflation rate is outpacing the official inflation rate of 4.2 percent by more than eight times.
In the first nine months of the Calderon administration, wages only increased between 4.1 percent and 4.75 percent, according
to the official Bank of Mexico.
High food prices are emptying consumers' pockets. In recent weeks, prices for green
tomatoes nearly doubled from about one dollar per kilo [2.2 pounds] to almost two dollars per kilo. Steak meat topped more
than US$6.00 per kilo, and bread prices continued their steady creep upward. Not all the news was bad, however. Onion lovers,
for instance, had occasion to celebrate. Beating the inflationary trend were tear-stoking bulbs, which actually decreased
in price.
In the northern border city of Ciudad Juarez, inflation is topping the national average. During the first
half of September, prices for pork increased by 2.6 percent, milk and dairy products by 4.5 percent, eggs by 9.09 percent,
limes by 14.2 percent, tomatoes by 27.4 percent, and cucumbers by 7.6 percent.
Analysts predict additional price increases
in the months ahead. Staring at a 25 percent increase in feed costs, livestock and poultry producers are expected to jack
up prices for their products soon.
While all Mexicans are subject to the price pinch, inflation is particularly unwelcome
news in households and communities dependent on remittances sent by US-based migrant workers. For a variety of reasons, remittances
are diminishing. What's more, the dollar doesn't buy as much in Mexico as it once did because of relatively stable peso-dollar
exchange rates.
Business and popular sector leaders offered varied explanations for the price surge. Rafael Galino,
leader of the Independent Campesino Central, blamed US-based transnational companies for manipulating the wheat and poultry
markets, but did not offer any immediate evidence of illegal shenanigans. Leopoldina Aguirre, general director of the National
Chamber of Small Commerce, a group that represents mom-and-pop grocery stores, contended that the rising cost of imports from
the United States, coupled with speculation stemming from the recent tax reform law passed by the Mexican Congress, were contributing
to inflation.
The escalating cost of living is bound to produce political consequences. Last December's tortilla price
hike provoked outbreaks of popular discontent across Mexico, with protests only subsiding after the Felipe Calderon administration
pledged to hold the price of tortillas at 8.5 pesos per kilo. A new anti-inflation movement, "Hunger is Wiping Us Out," affiliated
with the El Barzon organization, kicked off its campaign in Mexico City last weekend. In tandem with former presidential candidate
Andres Manuel Lopez Obrador, federal legislators who represent the center-left Party of the Democratic Revolution also announced
recently that they will back nationwide street protests against the latest price increases.
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Sources: El
Diario de Juarez, September 25, 2007. El Universal, September 23 and 24, 2007. Articles by Jorge Octavio Ochoa and the Notimex
news agency. La Jornada, September 14 and 20, 2007. Articles by Roberto Gonzalez Amador, Miriam Posada, Enrique Mendez, Roberto Garduņo and correspondents.
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Frontera
NorteSur (FNS)
Center for Latin American and Border Studies
New Mexico State University
Las Cruces, New Mexico
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(Reprinted
with authorization from Frontera NorteSur, a free, on-line, U.S.-Mexico border news source. FNS can be found at http://frontera.nmsu.edu/)
Translation
FNS
