Tariff on white corn will not lower the price of tortillas, it will only create distortions

The tortilla is one of the basic products and its price has increased substantially in Mexico, from an average value of 14.33 pesos in 2018, its price ended close to 22 pesos on average in 2022.

But the government said that “in order to guarantee a sufficient supply, it is necessary to maintain national production in our country and ensure market conditions that allow its price to stabilize,” for which reason it implemented said tariff.

However, this could have counterproductive effects.

Tortilla producers will not benefit

The tariff “does not benefit the 110,000 businesses that produce tortillas, nor will it lower the price of tortillas or prevent it from increasing. Therefore, it does not benefit the population either” and only “flour companies win,” said Blanca Mejía, from the Tortilla Governing Council, which brings together more than 60,000 traditional tortilla producers in Mexico.

The organization argues that the white corn market is very sensitive. So much so that, he points out, “when the first guaranteed price was established in this six-year term for producers with less than 10 hectares, the price of corn in the market shot up from 3,400 to 5,200 pesos per ton.” Which gave the first impulse to the increase of the tortilla that persists until today.

At the guaranteed price, which is currently around 6,400 pesos per ton, tortilla producers must consider transportation, packing, stowage, storage, and financing costs.