MEXICO – The government of Mexico has suspended import duties on food staples including corn oil, rice and wheat an attempt to tame soaring inflation.
In an announcement on the government’s official gazette, Mexico said the import waiver for food items which also includes potatoes, tuna, beef, chicken, milk, eggs and cornflour will last for at least a year.
Duties have also been suspended on imports of live cattle, pigs, sheep, goats and chickens, pending the approval of Mexico’s foreign trade commission.
The announcement, in the name of President Andres Manuel Lopez Obrador, described the initiative as The Package Against Inflation and Famine.
It said the action has been taken with the purpose of “reducing inflation and the fall in consumption of Mexican households”.
It added: “It is necessary and urgent to temporarily exempt the payment of import tariffs on products classified in 66 tariff items that are part of the basic basket.”
Mexican inflation rose to a 21-year high in April. Consumer prices rose 7.68% in the year to April and, in the month alone increased 0.54%, the country’s national statistics agency said.
The move to waive import duties is the Mexican government’s latest attempt to curb food inflation. Earlier this month, the government sought the agreement of domestic manufacturers to up production of staples including corn and beans.
Globally, food commodity prices have been at or near record-high levels for months, initially fuelled by demand recovering since the depths of the Covid-19 pandemic and further boosted by the war in Ukraine.
World food commodity prices “eased” in April, according to the UN’s index of a basket of key crops. Behind the slight decline lay a drop in the Food and Agriculture Organization’s index of vegetable-oil prices and a dip in its cereal index.
Nevertheless, the FAO said its overall Food Price Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, remained 29.8% higher in April than in the same month last year.
There is however no reprieve in sight for households as the recently released World Bank Commodity Markets Outlook noted that the impact of the Ukraine war on food prices is expected to linger a while longer.
According to the report, the war in Ukraine has dealt a major shock to commodity markets, altering global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through the end of 2024.
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