Mexico: Food prices reach record high

09:44, January 11, 2011      

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Many nations on this side of the world have been tackling rising prices. But many Latin American countries, too, are also wrestling with rampant inflation and record high food prices. CCTV reporter Yin Hang takes a look at Mexico, where inflation accelerated unexpectedly in December.

Consumer prices in Mexico rose 4.4 percent in December, up from the 4.32 percent gain in November.

Surging food prices are pushing up already high inflation in much of Latin America, raising concerns across the region.

Angela Zepeda, one customer said "I don't agree about the hike in prices because corn is a basic product. It should serve people's needs. Because it's the most consumed product."

More expensive corn has led to an increase in the cost of corn tortillas, a Mexican staple.

Nationally, prices for the corn patties shot up one percentage point in the first half of December alone and some tortilla makers raised their prices by as much as six percent.

Liliana Garcia, worker of Tortilla Shop said "We would like to, because we know families are suffering from the economic crisis in 2011. But we don't earn a lot after selling a kilo of tortillas."

The annual pace of food inflation more than tripled in November from two months earlier.

In South America, unrest over rising prices has already been seen in Bolivia where huge protests have broken out in the streets.

Flavio Machicado Saravia, Former Bolivian Economy Minister said "Along with a domestic supply policy of prohibiting the exportation of agricultural products, which stimulated an increase in production, what has happened in the last few years is that we have seen and importation of food from neighboring countries in significant quantities."

Yet for now, analysts don't expect the price of bread, tortillas or sugar to lead to further unrest this year because the region's central banks and governments are generally strong enough to control inflation and protect consumers from severe price shocks.

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