…But the tortilla price spiral appeared to come as a surprise. Although Mr. Calderón moved quickly, announcing a pact on Jan. 18 to freeze prices, the problem has not been resolved.

Even with the pact, the news reports focused on the fact that the price ceiling for the tortillas of about 35 cents a pound was about 40 percent higher than the price three months earlier and contrasted that with the 4 percent increase in the minimum wage, which is still less than $5 a day.

But because fewer than 10 percent of tortilla producers signed on to the agreement, the government had little power over those who did not. In some areas, prices have risen to 45 cents a pound. There is little more that Mr. Calderón can do to contain prices without huge expenditures for subsidies. Most analysts agree that the main cause of the increase has been a spike in corn prices in the United States, as the demand for corn to produce ethanol has jumped…

It’s also interesting to note the apparent connection to ethanol as the source of rising corn prices. Further evidence that biofuels, while necessary as part of reducing the harm of global warming, are not panacaeas and cannot replace the need to reduce overall fuel consumption.