Mexico will import at least one-fifth more yellow corn next season as higher fuel costs and a weak peso hit domestic crops while the same factors will drive up tortilla prices, the head of top corn farmer federation said in an interview. Juan Pablo Rojas told Reuters that yellow corn imports, nearly all of which come from the United States, will jump to between 16.8-19.2 million tonnes during the 2017/2018 season, which begins in April, from a projected 14-16 million tonnes this season.
Rojas, the president of national corn farmer federation CNPAMM, said a double-digit increase in gasoline and diesel prices that took effect on January 1 as well as more expensive inputs like herbicide due to a weaker peso would dive up domestic corn production costs by as much as 40 percent.
Despite a high-profile meeting convened by President Enrique Pena Nieto last week with business and union leaders pledging to limit rising prices for basics like tortillas, Rojas is not optimistic. "That's going to be very difficult because our institutions don't have the technical or operational capacity" to police higher prices, he said. Nearly all corn tortillas in Mexico are made with white corn, which is produced domestically.
Rojas said prices of tortillas, Mexico's staple food, will rise on average by about 7 percent to reach 14 pesos ($0.65) per kilo this year, but poorer, southern states could see spikes of more than 40 percent to 20 pesos per kilo.
Protests broke out after the government hiked gasoline prices. The hike is expected to drive the biggest month-on-month jump in inflation in 17 years in January and more expensive tortillas and other goods could fan consumer prices even higher.
Separately, Rojas said Mexican corn farmers would welcome an end to NAFTA, the free trade accord between Mexico, the United States and Canada that US President-elect Donald Trump has promised to scrap entirely or re-negotiate.
NAFTA is widely blamed in Mexico for flooding the local market with cheap, subsidized yellow corn.
"It would be better to open it up, renegotiate it, so that we can have better conditions," he said, adding that a new accord should ensure that white corn is not priced the same as yellow corn and that specialized native varieties of so-called landrace maize should be valued higher.
Rojas added that new import quotas should also be on the table.