A lesson in tortilla economics

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Fresh corn tortillas were selling today for 80 cents a kilo at one of the tortillerias in the Condesa neighborhood of Mexico City. Hot out of the bag, they taste nothing like the tough, bland discs sold at L.A. supermarkets.

A spike in tortilla prices to more than $1 a kilo this winter triggered demonstrations and fears of an inflationary spiral. They’re still selling for 20 cents a kilo more than Mexicans were paying a year ago. But apparently the government-negotiated price ceiling remains below the threshold of revolution.

Inflation still looms over the four-month-old administration of Mexican President Felipe Calderon. But central bank estimates this week show the threat easing. Mexico would like to keep inflation at 3%, but will settle for its current annualized rate of about 4%.

Posted by Sam Enriquez in Mexico City