TORTILLA PRICE WAR IN JUAREZ

By Kelly Simmons and Ana Vinas

Tortilla makers throughout Ciudad Juarez began raising their prices in October for a kilo of tortillas from the official authorized price of $2.00 pesos per kilo to $2.50 pesos per kilo. The manufacturers complain that they are being forced to purchase unsubsidized corn flour at higher prices on the open market which raises their costs.

The response from the Federal Consumer Protection Agency (Procuraduria Federal del Consumidor, Profepa) was swift. The Agency, in charge of enforcing official prices on consumer goods, immediately began an effort to close down the initial 18 offenders, as well as an additional 5 shops that followed suit. One shop, La Curra, was closed for 10 days. Meanwhile other manufacturers refused to close when approached by Profepa workers. Profepa has stated that they will begin using local police to force closures as well as applying fines.

Part of the problem, apparently, is the relationship between official price fixing of consumer commodities and the supply of government subsidized flour. The current price of tortillas, $1.70 pesos, is based on the subsidized price for corn that was set in 1990 of $500 pesos per ton. Now the subsidized corn flour price is $1000 pesos per ton and the maximum price per kilo that can be charged is $2.00 pesos. However, the price for corn flour on the open market is $2000 pesos per ton and many shops are being forced to either purchase extra flour on the open market due to shortages in the subsidized supply or close down for one to two days per week.

During the 1970s and 80s, tortilla makers were registered with Conasupo, the official consumer products agency, and were given quotas of corn flour at subsidized prices to make tortillas. During the 70s Conasupo offered two tons of corn flour per week to each tortilla factory and official prices were established based on the subsidized cost of flour. In late September, the agency was again in the process of registering tortilla makers and 300 factories in Juarez had signed up. Only registered owners can receive the subsidized price for flour, however, registration does not mean there will be any change in the amount of flour a shop can purchase. These amounts are already set by Conasupo.

Two flour companies, Maseca and Minsa, have also been accused of unfairly distributing subsidized corn flour to the bigger manufacturers and leaving the smaller companies without their full order of flour. A protest by 50 tortilla makers took place outside the offices of Maseca in early October over the delivery of corn flour needed by the shops. Protesters accused Maseca of failing to deliver to them and helping out the larger clients such as Soriana, Smart and El Comal. “They should have given us 70 tons but they only gave us 46 tons.”, said Ismael Rubio Nareja, a member of the Tortilla Makers Alliance. “When there is not enough flour to supply the larger manufactuers, they take it from the small shops”, he added.

Another factor pressuring the manufacturers to raise prices is rising energy costs and an increase to the Mexican minimum wage. (See Digest stories) According to Salvador Banuelos Montellano, a representative of the tortilla dough industry, the real cost of a kilo of tortillas is $3.40 pesos. Meanwhile the State Commission that controls the flour supply in Chihuahua stated in mid October that it would deny flour shipments to the 23 Juarez businesses that illegally raised prices.

In 1990 there were 280 tortilla companies in Ciudad Juarez and in 1996 the number had increased to 550 companies.

Sources: El Norte, Diario de Juarez


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