Mexican food companies face high prices of raw materials

Published 2021년 6월 8일

Tridge summary

Recent reports indicate a significant increase in the global prices of corn and wheat, the most severe in the last seven years, primarily due to adverse weather conditions and increased demand, especially from China. This surge has affected various sectors, including food and beverage companies, which have had to adjust by raising product prices or cutting costs to mitigate the impact. The price fluctuations, attributed to various factors including new harvests and market stabilization, have led to mixed financial results among companies such as Lala, Gruma, and Gimsa. Despite challenges like reduced operating cash flow, some companies like Lala have managed to grow their sales through price increases and cost-cutting measures. Independent analysts predict that the pricing trends could stabilize or decrease slightly, but high prices are expected to persist, influencing the pricing strategies of companies and the consumer market.

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Original content

MARA ECHEVERRÍA. EXPANSION. The companies use these raw materials, also called commodities, in different links of their production chains, from animal feed to the production of flour for bread or tortillas. But the rise in corn and wheat can unleash a chain of price increases in other inputs that, in the end, will impact the prices to the final consumer of some of the products. The price of corn and wheat reached its highest level in international markets in May, at least in the last seven years, driven by weather conditions, especially the frosts in the United States at the beginning of the year, as well as the increase in demand that occurred since the beginning of the pandemic in countries such as China. Marisol Huerta, analyst at Grupo Financiero Ve por Más, explains that the effect on the price of raw materials impacted in various ways in the first quarter, even some companies, such as Gruma and Bachoco, raised the price of their products to final consumers However, if the ...

Source: Inforural