A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Soaring corn prices:
Mexico officially intervenes on financial markets

10 January 2011



As the price of corn (maize) and tortillas soar in Mexico, the government has declared that it will protect the population from further price rises by dealing directly on financial futures markets. An unprecedented statement.

Corn prices did indeed rise sharply during December: the price per bushel1 increased to more than $6, an increase of nearly 46% compared to January 2010, the highest level since mid-2008. Faced with this fluctuation, tortilla manufacturers have threatened to increase their prices by 50%. An increase that would be dangerous to political and social balance as tortillas, consisting primarily of corn, are the staple food of millions of Mexicans. The country has experienced previous food riots in 2007, precisely because of high inflation on tortillas.

Consequently, fearing repeat riots, the government has taken an unprecedented step. The Minister of Economy, Bruno Ferrari publicly announced on 22nd December 2010, that the government had bought futures contracts on the Chicago Mercantile Exchange to guarantee acceptable prices for consumers. 4.2 million tons of grain have been purchased by the Mexican government through options on futures markets and this, on behalf of agribusiness professionals. “The price and supply of corn, will be guaranteed until the third quarter of 2011” said the minister.

For Richard Feltes, an analyst at a brokerage firm, “this is the first time a State has publicly revealed its intention to buy futures contracts”2» . A statement that shows that at a time when agricultural commodity prices are increasingly volatile, we are witnessing the unabashed return of State intervention on the markets.

1 A bushel is the measure used in the USA and for corn (maize) is equivalent to 0.0254 metric tonnes.
2 Source : Financial Times 22 December 2010.

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