EconomyFinancialLAST MINUTE: Gruma will maintain the price of corn...

LAST MINUTE: Gruma will maintain the price of corn flour towards the end of the year

Gruma, the Mexican company that produces nixtamalized corn flour and other derived products, will keep the price of the product unchanged in the remaining months of this year, while inflation puts pressure on the price of tortillas, which in some areas of the country already exceed 20 pesos a kilo.

Company executives recalled that, as part of their adherence to the Package Against Inflation and Famine (PACIC), the prices of nixtamalized corn flour have not increased in the last three months and that they plan to continue like this for the remainder of the year.

“The program just highlights this strategy that we have of not raising prices during the second half of the year for corn flour,” the directors said during a call with analysts to discuss their financial results for the third quarter of 2022.

For the Red del Maíz, the price of tortillas will not fall with the implementation of PACIC, since it considers that the benefit has not been transferred to the tortilla factories, which deal with disproportionate increases in flour and other inputs necessary for the preparation of tortillas. . The price of dough rose 13.08% from December 2021 to September of this year, while that of tortillas increased 13.59% in the same period, according to Inegi data.

In September, headline inflation stood at 8.7% at an annual rate, its highest level in 20 years. Analysts consulted by the Bank of Mexico (Banxico) project that the index will close the year at 8.44%.

“In order for market conditions to improve and to be reflected in the price of a kilo of tortillas in the following months, regional centers for the collection and distribution of corn must be installed, as well as a fund for its acquisition,” the association said in a statement. release.

The PACIC 2.0, which refers to the second phase of this plan that began at the beginning of the month, contemplates the delivery of a license so that the companies that joined the program are exempt from the review of regulations that prevent or make imports and importation of food and its mobility within the country.

The impact for Gruma

While the company joins the government’s plans to reduce the impact of inflation, it suffers the ravages of the rise in raw materials and supplies. From July to September, cost of sales increased 22% to 927.5 million dollars, due to the impact on the price of raw materials and higher energy and fuel costs.

As a result, Gruma’s cost of sales as a percentage of net sales increased from 64 to 64.5%, according to the company’s financial report.

The Mexican company’s sales volume grew 4% to 1,093 thousand metric tons compared to the third quarter of last year. Net sales grew 21%, to 1,438.7 million dollars, the company detailed in its income statement.

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