Mexico City, Aug 15 - The Mexican government has agreed with corn farmers, flour producers and tortilla makers to extend a price freeze on tortillas through end-2007 to help curb inflation.
The decision to hold prices of the corn patties at 8.50 pesos per kg (35 U.S. cents a pound) was taken late on Tuesday and came despite a decline in corn prices from historic peaks at the start of the year.
Prices for corn surged at the start of this year to their highest in a decade due largely to increased demand from U.S. ethanol fuel producers, prompting the Mexican government to persuade producers to cap corn flour and tortilla prices in January.
It renewed the price cap in April and again on Tuesday.
Previously, companies like Mexican corn flour and tortilla maker Gruma set their own prices for tortillas.
However, the price spurt at the start of the year to around 10 pesos a kg (41 U.S. cents a pound) hurt poor families in Mexico for whom tortillas are a daily staple, and fanned wider worries about inflation.
Corn prices have slipped back in recent months on the back of big U.S. plantings and a healthy spring harvest in Mexico.
Mexico, widely considered the birthplace of corn, tops up its national crop with millions of tonnes of U.S. corn imports every year.
Mexican consumer prices jumped 0.42 percent in July, accelerating from June and pushing 12-month inflation above the 4-percent limit the central bank says is acceptable.