International Prices of food. Statements by the Minister of Finance of Peru (January 2011) 
" The economy minister, Ismael Benavides , said today he expects the price of food products in Peru should not rise more levels it has today. He explained that prices of major food commodities matters Peru, like oil, wheat and maize, increases above 50% in the last six months.
"This is due, firstly, the high growth of other countries in the world demanding the same food as China and India, which are skyrocketing increase in demand, as well as some bad harvests in Argentina Minister Benavides said " .
The basic food basket according to INEI (National Institute of Statistics and Informatics), the Peruvian agency that issues the official statistics, is set at S /. 1,293 nuevos soles (Metropolitan Lima), and the basic components of this pack are:
- Food & Beverages ......................... ........... 37.82%
- Apparel and Footwear ........................................ . 5.38%
- Housing, fuel and electricity ....... 9.27% \u200b\u200b
- Furniture and fixtures, mantle. housing ......... 5.75%
- Care and maintenance Health ......... 3.69%
- Transport and Communications .................. 16.45%
- Education, culture and recreation ......... 14.93%
- Other goods and services ............................
In the area of \u200b\u200bfood and drinks, there are two divisions, Foods and Beverages in the home reaches 26 , 08% and food and beverages away from home with 11,11,73%.
According to INEI methodology, it is 5.55% bread and cereals, hence the impact of a rise, as indicated by the minister Benavides , the order of 50% in international prices of wheat and corn, affect this component as follows:
5.55% + (5.55% * 50%) = 8.33% equivalent a direct increase of 2.78% in the area of \u200b\u200bfood and beverages, within the home. But if the family further consumption outside the home premises (parents working outside the home), this impact is doubled, since the component is the same or even greater, because it incorporates the range of benefits provided by the market these goods and services, so we can assume an impact of 5.55% in this area, which means that this area in general (for simplistic purposes calculation before seen) would not be of 37.82%, but would become 43.37% .
Since basic family basket redistributes the costs among the items seen above, Peruvian family definitely will restrict other services, considered lower priority compared to increasing food costs . But it sumase to recent rises in fuel and electricity in Peru (Diciembre/2010-Enero/2011), the basket is completely changed, in terms of the expenditure by Peruvian families.
According to company surveys support, socioeconomic distribution in metropolitan Lima:
- Segment A ............... 5.2% (income above S /. 10,600)
- Segment B ............... 17.7% (income above S /. 3350, to S /. 10 599)
- Segment C ............... 33.1% (income above S /. 1530, to S /. 3349)
- Segment D ............... 30.2% (income above S /. 1,000, up to S /. 1529)
- Segment E ............... 13.8% (income above S /. 670, up to S /. 999)
then be the basic family basket of consumption of S /. 1293, segments C, D and E will actually most affected by these price increases, it is that over 77% of Lima households are affected directly , given their low average income levels.
There are several indirect ways to counteract the negative effects of imported price inflation of the products that make these items of food and beverages, excluding a direct increase in salary, such as:
- Improve public transport services reducing the usage time between destinations and using alternative fuels to gasoline.
- The creation of greater competition and lower barriers of entry to services public and private communications.
- Create an open trade policies toward alternative markets overseas producers
- Enhancing the agricultural sector for domestic consumption
- The creation of road infrastructure and logistical support for the food market.
- Reducing consumption of goods and services via higher priority to direct taxes, alcohol and snuff.
- The generation of enhanced competition and reduced barriers to entry of medical services and products and medicinal generic drug.
- And above all, the reduction of costs Corruption, which indirectly impact on the pockets of all segments, especially in segments C, D and E are treacherously harmful. Another
if Minimum Wage Vital ( SMV) in Enero/2011 Peruvian reached S /. 580 new soles, represents only the Basket 44.86% Consumer Staples family, painfully showing that the reference wage is barely enough to avoid starvation in Peru and that no government has so far found right way to balance income of Peruvians, but on the contrary, hardly manage to keep it, shows the inefficiencies of politicians on economic issues.
