Did you know EdGlenToday.com is free for you thanks to our awesome advertisers? We noticed you're using an ad block software. Help us spread the word and give our sponsors some exposure by disabling your ad blocking service for Riverbender.com.
Pricey tortillas: LatAm's poor struggle to afford staples
AP May 13, 2022 3 days ago
A worker packages tortillas to sell for 20 Mexican Pesos per kilogram, about one dollar, at a tortilla factory in Mexico City, Monday, May 9, 2022. Almost a year ago the same tortilla factory used to sell a kilo of tortillas for 10 Mexican Pesos. (AP Photo/Fernando Llano)
A vegetable vendor gives change to a customer at Medellin Market in Mexico City, Monday, May 9, 2022. Inflation in Mexico accelerated in April that brought the annual rate to 7.68%, the highest in two decades. (AP Photo/Fernando Llano)
A customer pays with a 200 peso bill (about 10 dollars)
A woman walks past a fruit vendor at a street market in Rio de Janeiro, Brazil, Wednesday, May 11, 2022. High inflation in Brazil is eroding the buying power of consumers and angering potential voters, who fault President Jair Bolsonaro for not doing enough about it. (AP Photo/Silvia Izquierdo)
A sign taped to a storefront advertises a slice of pizza and a soda for 6 U.S. dollars, in Caracas, Venezuela, Thursday, May 12, 2022. A new tax law approved by the Venezuelan government, that went into effect in March, applies a 3% tax charge on transactions paid in foreign currency. (AP Photo/Ariana Cubillos)
Women cook at a soup kitchen to feed residents in the Puerta de Hierro neighborhood, in La Matanza district of Buenos Aires, Argentina, Wednesday, May 11, 2022. Argentines have lived with double-digit inflation for years, but the latest increase in prices is causing more to rely on food aid. (AP Photo/Rodrigo Abd)
An espresso cup is prepared at a restaurant in Sao Paulo, Brazil, Thursday, May 12, 2022. Coffee is among the products that rose in price recently, eroding the buying power of consumers and angering potential voters, who fault President Jair Bolsonaro. (AP Photo/Andre Penner)
Residents, some working on community construction projects, eat at a local soup kitchen in the Puerta de Hierro neighborhood, in La Matanza district of Buenos Aires, Argentina, Wednesday, May 11, 2022. Argentines have lived with double-digit inflation for years, but the latest increase in prices is causing more to rely on food aid. (AP Photo/Rodrigo Abd)
People gather in the Plaza de Mayo in a demonstration organized by social organizations representing the unemployed to protest against the government's economic policy, in Buenos Aires, Argentina, Thursday, May 12, 2022. (AP Photo/Rodrigo Abd)
MEXICO CITY (AP) — No item is more essential to Mexican dinner tables than the corn tortilla. But the burst of inflation that is engulfing Latin America and the rest of the world means that people like Alicia García, a cleaner at a restaurant in Mexico City, have had to cut back.
Months ago, García, 67, would buy a stack of tortillas weighing several kilograms to take home to her family every day. Now, her salary doesn't go so far, and she’s limiting herself to just one kilogram (2.2 pounds).
“Everything has gone up here,” she told The Associated Press while standing outside a tortilla shop. “How am I, earning minimum wage, supposed to afford it?”
Countries had already been absorbing higher prices because of supply chain bottlenecks related to the COVID-19 pandemic and government stimulus programs. Then Russia’s invasion of Ukraine in late February sent https://apnews.com/article/russia-ukraine-putin-business-health-europe-c6a2d11380d3cb0c48d4c22703d1954e">fertilizer prices sharply higher, affecting the cost of agricultural products including corn. Global fuel prices jumped, too, making items transported by truck to cities from the countryside costlier.
In beef-crazy Buenos Aires, some households have started seeking alternatives to that staple.
“We never bought pork before; now, we buy it weekly and use it to make stew,” Marcelo Gandulfo, a 56-year-old private security guard, said after leaving a butcher’s shop in the middle-class neighborhood of Almagro. “It’s quite a bit cheaper, so it makes a difference.”
Last year, the average Argentine consumed less than 50 kilograms of beef for the first time since annual data were first collected in 1958, according to the Argentine Beef Promotion Institute. Over the past few months, prices have been “increasing a lot more than normal,” said Daniel Candia, a 36-year-old butcher.
“I’ve been in this business for 16 years, and this is the first time I’ve seen anything like this,” he said.
Higher rates are a government’s primary tool to fight high inflation. But jacking up rates carries the risk of weakening an economy so much as to cause a recession. Last year, the World Bank estimated that the region’s economy grew 6.9% as it rebounded from the pandemic recession. This year, Malpass said, it’s projected to grow only 2.3%.
“That’s not enough to make progress on poverty reduction or social discontent,” he added.
Brazilian newspapers are telling their readers which foods they can substitute for their usual products to help stretch family budgets further. But some items, like coffee, are irreplaceable — especially in the nation that produces more of it than any other in the world.
Ground coffee has become so expensive that shoplifters have started focusing their sights on it, said Leticia Batista, a cashier at a Sao Paulo supermarket.
“It breaks my heart, but I told many of them to give the powder back,” Batista said in the upscale neighborhood of Pinheiros.
In her own humbler neighborhood, she said, the cost of coffee “is a big problem.”
On the more upscale end of the java spectrum, Marcelo Ferrara, a 57-year-old engineer, used to enjoy a daily espresso at his local bakery. Its cost has shot up 33% since January, to 8 reais ($1.60). So he's cut his intake to two each week.
“I just can’t afford too many of these,” Ferrara said as he gulped one down.
It has been decades since the region’s countries simultaneously suffered soaring inflation. A key difference now is that the global economies are much more interconnected, said Alberto Ramos, head of Latin America macroeconomic research at Goldman Sachs.
"Interest rates will need to go up; otherwise, inflation will run wild and the problem will get even worse," Ramos said. “Governments cannot be afraid of using rates. It is a proven medicine to bring inflation down.”
So far, though, higher rates aren't providing much hope that inflation will decline significantly in the near term. The International Monetary Fund https://www.imf.org/en/Publications/WEO">last month projected that average inflation in the region, excluding Venezuela, will slow to 10% by year end. That’s not much below the 11.6% rate registered at end-2021 and still more than twice the 4.4% expected for advanced economies, according to the IMF’s World Economic Outlook.
“It will take at least a couple of years of relatively tight monetary policy to deal with this,” Ramos said.