Guatemala City — Food prices are soaring in Guatemala, affecting staple dishes such as red tamale, a dish of Indigenous origin prepared from corn dough or rice and stuffed with meat, vegetables, chili or dried fruit such as prunes or almond, as well as the price of milk.
The so-called ‘tamale effect’ is usually most keenly felt in December, due to the rise in the cost of agricultural products, and because the dish is traditionally eaten during Christmas and New Year. But prices have already risen since the beginning of this year.
Apart from being a seasonal dish, tamales are also part of the Guatemalan staple diet and are a traditional breakfast or lunch for workers, who leave their homes early and are typically served tamales in makeshift kitchens, while tamales are also typically served in the family home on a Saturday night.
A survey conducted by Bloomberg Línea shows that the increase in the prices of ingredients for the preparation of tamales ranges from 60-100%. Tamales are traditionally sold for five quetzals each ($0.65), but are now on sale for between eight and 10 quetzals ($1.04-$1.30), according to housewives consulted.
“Unfortunately the cost of the basic food basket has risen, and both the consumer and the producer are affected,” Guatemalan citizen and housewife Alejandra Almengor told Bloomberg Línea.
For her part, Ana González, a Guatemalan woman who has been making and selling red tamales for more than 30 years, said that she has had to increase the price to the final consumer because some of the ingredients have gone up in price, among them, tomatoes, peppers, corn and the garnish.
Unusual price rises
In November of last year, the price of tomatoes, the main ingredient for the preparation of tamales, saw its sharpest rise in five years, to eight quetzals ($1.04) to the pound, compared to Q3.50 ($0.45) in October.
This was due to a temporary shortage resulting from a decline in harvest yields, with a 50-pound box of tomatoes accumulating an increase from Q163 ($21.23) to Q232 ($30.22) in November 2021, according to a report by the Ministry of Agriculture, Livestock and Food (MAGA).
Wilfredo Morán, director of the Federation of Agricultural Associations of Guatemala (FASAGUA), told Bloomberg Línea that in November there were price increases in several products, as a result of a decline in harvest yields.
However, he said that prices returned to their previous values last December, due to various tomato plantations entering production, which normalized supply by the end of 2021.
However, Morán acknowledged that, during the first four months of this year, there have been price variations, both upward and downward, in tomatoes, peppers and cucumber, among other products.
For example, between January and February of this year, prices were low as consumption dropped following the Christmas and New Year festivities, when consumers traditionally tighten their belts.
Since March, prices have stabilized and a box of tomatoes has remained between Q150 ($19.54) and Q160 ($20.84).
When the rainy season begins in Guatemala, a price peak occurs again, because tomatoes, peppers, onions and potatoes are the crops most susceptible to flooding.
But apart from the effect of the weather, the country’s harvests have also been impacted by the increase in the price of fertilizers, and which are still high, with a bag of urea that cost Q200 ($26.04) having risen to Q500 ($65.11), while the cost of fuel, for transportation to different points of sale, has also risen, and “the current prices do not compensate for these increases”, according to Morán.
Corn prices impacted by fertilizer costs
Another of the basic ingredients used in the preparation of tamales is corn, with grain prices also having increased during the course of this year, Gustavo Rivas, president of the National Association of Basic Grains (ANAGRAB), told Bloomberg Línea.
In addition, there has been flooding on the Central American country’s southern coast and which has seen rising river levels in areas where corn is grown, causing crop losses, including in new plantations.
“Prices range between Q175 and Q180 ($22-$23.50) per 100 pounds of corn, as a result of the increase in fertilizer costs,” Rivas said.
According to the last MAGA report, which corresponds to May 19-25, the price of white corn rose due to a decrease in the supply of grain from Mexico.
The grain traded during that week came from reserves in the north and east of the country.
Rise in CPI
According to the latest Consumer Price Index (CPI) prepared by Guatemala’s statistics agency INE, during April, the CPI stood at 156.93, registering a monthly inflation of 0.54%, with year-to-date inflation of 2.43%.
Inflation was highest in April for air transportation (up 0.11%), tortillas (0.06%), bread (0.06%) and corn (0.05%).
According to INE, the monthly cost of basic food supplies in April was Q3,218.03 ($420).
Milk, out of reach for many
Milk is also a basic product that is becoming too expensive for many people in Guatemala.
“The best food is still milk and its derivatives, but due to economic issues most of the population cannot pay between Q10 and Q12 ($1.04-$1.56) for a liter of milk,” Wilfredo Fernández, executive director of the Guatemalan Chamber of Industry’s Dairy and Derivatives Association, told Bloomberg Línea.
Currently, the dairy sector in Guatemala produces 1,400,000 liters per day, and generates 10,000 direct jobs and 40,000 indirect jobs, but per capita milk consumption, at 60 liters, is one of the lowest in the region, while the World Health Organization (WHO) recommends an average per capita consumption of 160 liters.
Some Latin American countries have per capita consumption above that recommended by the WHO, such as Chile, Uruguay, Argentina and Costa Rica, while Bolivia has implemented policies to increase consumption.
In Guatemala however consumption is lower, even compared to Caribbean countries, where consumption is lower due to the lack of large areas of land for raising livestock.
Fernández says that Guatemala needs to develop its dairy industry given that the country has one of the world’s highest malnutrition rates, of 48%.
Powdered milk in Guatemala costs an average Q38 ($4.94) for a 460-gram packet, while a liter of milk costs Q12.89 ($1.67), according to INE’s April 2022 report on basic food prices.
While there is the potential to increase milk consumption, its price makes it hard to access for many people, even on the minimum wage.
“The 50% of the population who live informally or earn the minimum wage cannot buy milk and their consumption of it is zero, which is a serious issue,” Fernández says. “It is not because the population has health problems that prevent them from consuming it, rather it is a poverty issue.”
Minimum wages in Guatemala range between Q11 and Q12 ($1.43-$1.56) per hour.
