MEXICO CITY, Aug 21 (Reuters) - Mexico is considering dropping tariffs on egg imports if recent steep price rises do not start to reverse soon, Economy Minister Bruno Ferrari said on Tue sday.
Egg prices have more than doubled in some states in recent weeks after an outbreak of avian flu in Jalisco, the state that produces 52 percent of Mexico’s total egg consumption of 2.5 million tonnes a year.
Mexico is the world’s top consumer of eggs per capita. It has already opened a tariff-free import quota for 221,000 tonnes of eggs for human consumption and another 24,400 tonnes for industrial use, dropping a 45 percent duty on imports from countries including China, Turkey and Ukraine.
Amid newspaper headlines proclaiming an “egg crisis” and reports blaming price gouging for much of the increase, Ferrari said the government could take further action to support demand in the face of “unjustified” increases.
“We will even drop tariffs so that there can be unrestricted imports of firstly, eggs for industrial use, and secondly, table eggs if there is not a change in the behavior of producers and retailers,” he said in a radio interview.
“If it’s necessary we will free up tariffs not only on the 211,000 (tonnes) .... but on egg imports in general.”
Ferrari said 17 pesos per kilo was a reasonable price for eggs. In some parts of the country -- including Mexico City -- prices are as high as 35-40 pesos ($2.70-$3.00), according to the economy ministry.
The egg spike comes on top of a wave of rising food prices worldwide, due largely to a severe drought in the United States, which has fanned fears of a repeat of the global crisis experienced in 2007 and 2008.
In Mexico, where tens of thousands of people protested in 2007 over rises in the price of tortillas, the corn staple, rising fresh food prices have pushed inflation to a more than two-year high above the central bank’s 4 percent ceiling. Policymakers are watching for signs of knock-on effects.
Eggs, although they have a low weight in the consumer price index, are commonly consumed and as such may feed into perceptions of rising inflation in the country of 115 million people and risk contaminating inflation expectations.
Still, Finance Minister Jose Antonio Meade played down the prospect of a repeat of 2007.
“For grains and all other agricultural products, supply is secure,” he told reporters, adding that the government was considering assistance programs to help offset the food price increases.