The resistance of inflation in Mexico has responded to the strength of domestic demand, moving towards services, but the debate could now focus more closely on the weather conditions.
Droughts and high temperatures could become a problem in the fight against inflation, since they affect the formation of prices on products such as fruits and vegetables, mostly.
In fact, this component was the main catalyst for prices during April, in which general inflation stood at 4.65 percent annually, from 4.42 percent in March.
Has anyone already found the correlation between the degree of drought faced by the agricultural regions of the country, plus the producers of the main imports and today’s inflation data? I have a suspicion that there is an explanation there (and bad news for monetary policy),” said Luis Monroy-Gómez-Franco, a researcher in the Department of Economics at the University of Massachusetts, on his X account.
Only in April, inflation of fruits and vegetables rose 3.94 percent at a monthly rate, the highest for the same month since 2021, indicated the INEGI.
At an annual rate, the inflation of fruits and vegetables was 18.57 percent, which linked five months with double-digit rates.
Regarding the droughts, the Mexican Institute for Competitiveness (IMCO) reported that, at the end of February of this year, almost 70 percent of the population in the country went through a droughtand almost 50 percent were in a place with a severe, extreme or exceptional drought.
Which fruits and vegetables rose the most in price in April 2024?
Within these products, in which the INEGI monitors 31 fruits and vegetables, 26 marked an annual rate above the general price level which was 4.65 percent in April.
And of the 26 generics, 25 have double-digit rates, according to INEGI data.
For example, the highest inflation was that of onions, with 82.53 percent annual in April; cucumber, 58.56 percent, and green tomato, 57.10 percent.
The persistence of the adverse climate for the crop is a factor against it, since the production process does not cover the demand and due to lower supply prices could rebound going forward.
As an effect, establishments such as restaurants could increase their prices to consumers, due to the increase in their inputs of fruits and vegetables.
