May 27, 2008

Mexico lifts import taxes on corn to tame domestic prices

The Mexican government announced Sunday (May 25) to eliminate import taxes on corn and wheat to rein food prices.

Mexican president Felipe Calderon blamed high food costs on global factors, including rising energy prices, soaring food demand in China and India and the use of corn for ethanol production.

Calderon said a quota of soy would be imported tax-free and duties on powdered milk would be slashed by half.

Tariffs will also end for sorghum and soy pasta.

Furthermore, the government would abolish import taxes on nitrogen fertilizer and chemicals needed to manufacture fertilizer.

Mexico also gears to modernize irrigation systems for 53,000 acres by the end of the year.

The country's consumer prices rose 4.55 percent in the 12 months ending April 30, the biggest inflation hike since 2005.