MEXICO CITY, Oct 7 (Reuters) - Mexico's antitrust

watchdog Cofece ruled on Monday that corn flour and

tortilla-maker Gruma can fix prices in the market, concluding

following an investigation that competitive conditions in the

key food segment do not exist.

Cofece said Gruma controlled between 50% and 90% of the

market, adding in its ruling that it should break off some of

its assets and halt various commercial strategies it employs.

Gruma said in a statement released after the decision that

it has cooperated with Cofece's investigation, adding it has

always operated lawfully.

It added that due to the preliminary nature of the ruling,

it was not possible to predict how the antitrust body's

governing body would ultimately resolve the case.

Cofece's investigation covered both the distribution and

marketing of corn as well as the production, distribution and

marketing of corn flour and related services, according to the

watchdog's announcement published in the official government

gazette.

"This market is fundamental for Mexico's economy and the

wellbeing of consumers, especially due to its impact on the

price of tortillas," the Cofece ruling said, referring to the

country's staple food.

(Reporting by Raul Cortes; Editing by David Alire Garcia and

Emelia Sithole-Matarise)