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Mexico to Eliminate Grain Taxes to Help Reduce Prices
Mexico will eliminate import tariffs on wheat, corn, rice and beans and cut in half a tariff on powdered milk to help lower food prices amid the highest inflation rate in more than three years.
The government will also eliminate import taxes on nitrogen-based fertilizer and provide farmers with a line of credit for imports of the chemical, President Felipe Calderon said today during a news conference in Mexico City.
``The government is obligated to make sure that products get to the final consumer at the lowest price possible,'' Calderon said.
Consumer prices rose 4.83 percent in the first half of May as costs for cooking oils, rice and fuel soared. Mexico, which has the highest inflation rate since December 2004, will use some of its surplus funds to continue subsidizing energy costs.
The cost of importing grains, including rice, wheat and corn, has soared 75 percent to $1.2 billion in the first three months of 2008 compared with a year earlier, according to the National Statistical Agency.
Mexico joins countries around the world that have cut import tariffs and released stockpiles of grains to keep prices down this year. Corn, wheat and rice have all reached records this year, leading to riots in countries from Egypt to Haiti.
Mexico will not limit exports of its crops, which countries such as Vietnam and Thailand have done to keep prices down, Deputy Agriculture Minister Jeffrey Max Jones said in an interview with Bloomberg News last month.
Aid to Poor
The government will increase aid to the 5 million poorest families by 22 percent to 655 pesos a month, Calderon said. The government-run supermarkets that sell staples such as rice and corn flour to those families will also keep prices at current levels, he said.
Mexico, the 11th-largest grain producer in the world, will create a strategic corn reserve to store the grain, helping keep the cost down for the poorest Mexicans, Calderon said. Farmers may produce 25 million metric tons of corn this year, a record crop, Agriculture Minister Alberto Cardenas said this week.
The record crop will help the country import about one million fewer metric tons of corn.
Tags · Feed Prices · Grain Prices · Mexico · Taxes · Tariffs
25.05.2008. 13:27
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