Laurel, who also chairs the NFA Council, announced that the lower band of the buying price will be set at P23 per kilo, down from the previous floor price of P25.
Despite the reduction, the new rate remains at the higher end of last year's price range, which spanned from P16 to P23 per kilo.
The NFA Council had approved an increased buying price range of P17 to P30 per kilo in June, allowing the NFA to better compete with private traders.
The move was driven by factors such as El Niño's impact and India’s rice export ban, which contributed to higher prices. India lifted its export ban last week, potentially easing global supply concerns.
“World prices of rice have gone down. But rice prices in the local market won’t decline if the buying price of palay remains high,” Tiu Laurel stated. “At P23 per kilo, farmers will earn a decent return for their efforts.”
“Actually, even at P21 per kilo, they’ll still enjoy a good profit,” he added. “We have the interests of farmers at heart when we determine the buying price of palay.”
NFA Administrator Larry Lacson said the adjustment to the procurement price, set to range between P23 and P25 per kilo, will be gradual and will account for factors like palay quality and prevailing market conditions.
Approximately two kilos of palay are needed to produce one kilo of rice, with the retail price generally being twice the palay cost after accounting for processing and marketing.
The NFA aims to purchase between 6.4 million and 8.7 million 50-kilo bags of palay during this wet season.
