Mexico City - Looking ahead to the G8 summit in Japan in July, Germany and Mexico have agreed to present a joint initiative to stabilize the global prices of foodstuffs, German Chancellor Angela Merkel said Monday in Mexico City.

In the last leg of a Latin American tour that also took her to Brazil, Peru and Colombia, Merkel said she reached an agreement with Mexican President Felipe Calderon to deal jointly with an issue that has become "a central question" for international politics.

"We can do many things wrong here (in Latin America) if we do not pay attention to it," Merkel said. "However, we can do many things right, and secure many jobs in Germany, if we build long-term partnerships."

The rise in the price of corn, a staple in the Mexican diet across all sectors of society, has caused particular worry in Mexico in recent months. Neighbouring countries like Haiti and Honduras have even seen violent riots in a reaction to rising food prices.

Merkel, who arrived in Mexico late Sunday, was given an official welcome at the central courtyard of the National Palace, prior to a Mexico and Germany Economic Forum. She was set to return to Germany later Monday, after a series of meetings at the National Palace in Mexico City.

Calderon attended last year's G8 summit in Heiligendamm, Germany, alongside the leaders of a group of emerging countries such as Brazil, India, South Africa and China.

Merkel said Mexico is worried that the current situation of the economy may not allow for guarantees of food supply at reasonable prices. The two countries agreed on "a long-term strategy."

The German chancellor toured the centre of Mexico City on foot on Sunday, and at night she had dinner with Calderon.

The United States is Mexico's main trade partner and claims over 80 per cent of the volume of its commercial exchanges.

According to figures made public by the Mexican-German Chamber of Commerce and Industry, over 1,000 German firms are currently active in Mexico, and the volume of trade between the two countries is almost 14 billion dollars a year. (dpa)