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Mexico will eliminate tariff on wheat imports

Mexico announced that it will eliminate the 15% tariff it applies to wheat imports as part of a series of measures to lower inflation.

Mexican imports of wheat totaled 1,573 million dollars in 2021, according to data from the Ministry of Economy.

Its largest suppliers were the United States (1,273 million dollars), Canada (234 million), Ukraine (56 million) and Russia (11 million).

The elimination of this tariff is part of the Package against inflation and famine (Pacic) that includes a series of foreign trade and other measures to put downward pressure on Mexico’s inflation.

Also, the Mexican government will not charge tariffs for six months on imports of corn oil, palay rice, tuna, pork, chicken, beef, onion, jalapeño pepper, beans, eggs, toilet soap, tomato, milk, lemon, apple, orange, box bread, potato, pasta for soup, sardine, carrot, corn flour, wheat flour, white corn and sorghum.

Tariff and inflation

Mexico has faced an environment of high inflation, in which the upward pressures on the prices of multiple goods and services derived from the shocks caused by the Covid-19 pandemic and the war between Russia and Ukraine have been intensifying.

Thus, annual headline inflation has remained above the 3% target, reaching levels not seen in two decades at the end of 2021.

World inflation continued to rise, pressured by bottlenecks in global supply chains, the recomposition of spending towards merchandise, high food and energy prices, as well as the recovery of some services.

As a result, inflation in most of the main advanced and emerging economies remained above the targets set by their respective central banks.

In particular, according to the Bank of Mexico, between the third and fourth quarters of 2021, annual headline inflation went from an average of 5.80 to 6.99 percent.

In March 2022, the National Consumer Price Index (INPC) presented a variation of 0.99% compared to the previous month, according to the INEGI.

With this result, annual headline inflation stood at 7.45%. In the same month of 2021, monthly inflation was 0.83% and annual 4.67 percent.

 

Redacción Opportimes

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