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May 17, 2022

Mexico to waive import duties on food staples as inflation bites

In an announcement on the government’s official gazette, Mexico said it will suspend duties for at least a year.

By Andy Coyne

Mexico is suspending import duties on food staples including corn oil, rice and wheat in an attempt to curb soaring inflation.

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In an announcement on the government’s official gazette, Mexico said it will waive duties for at least a year.

The move 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.

It has now published a list of products on which import duties will be waived. The list includes bread, potatoes, tuna, beef, chicken, milk, eggs and cornflour.

Duties will also be suspended on imports of live cattle, pigs, sheep, goats and chickens, pending the approval of Mexico’s foreign trade commission.

The waiver, which also includes non-food household staples, takes effect from today (17 May).

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.

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.

The FAO Food Price Index averaged 158.5 points in April, down 0.8 percent from March’s all-time high.

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.

See Just Food’s analysis here: As commodity supplies shrink and prices rise, low-income countries feel impact of Ukraine war

For more on Just Food’s coverage on how the conflict is affecting the food industry, please visit our dedicated microsite.

Just Food parent GlobalData is providing an ongoing analysis of the war’s impact across business sectors.

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How is technology having an impact on Consumer buying behavior?

As the world rapidly becomes more connected, it is important for brands to understand the impact that improved technology is having on consumer purchasing behaviors. To react effectively, brands must know how to engage with increasingly digitally savvy consumers. GlobalData’s latest Trend Tracker report provides an analysis of Digital Lifestyles – one of GlobalData's top consumer trends for 2022. The report includes an overview of how digital lifestyles are evolving, including the significant impact that the COVID-19 pandemic had on accelerating digitalization, and how this trend is emerging across different Consumer sectors. Key features included in the report:
  • A breakdown of the trend’s prominence across sectors
  • Insights into consumer online penetration, preferred electronic devices and engagement
  • The key drivers and challenges impacting the digital lifestyles trend
  • A spotlight on key innovations set to reshape the consumer landscape
  • Analysis of what’s next for digital innovations and how brands can leverage the trend
Download this report to keep in touch with the more digital consumer.
by GlobalData
Enter your details here to receive your free Report.

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