Punjab's Grain Procurement Body Restarts FRK Manufacturer Empanelment Mid-Season, Creating Trade Uncertainty
In a significant development that has sent ripples through Punjab's rice trade, the Punjab State Grains Procurement Corporation (Pungrain) has initiated the process to restart empanelling manufacturers of fortified rice kernels (FRK) for supply to rice millers. This move comes midway through the ongoing kharif marketing season, catching many stakeholders off guard.
What Are Fortified Rice Kernels?
Fortified rice kernels are tiny, rice-shaped grains manufactured from rice flour blended with essential vitamins and minerals. These specialized kernels are mixed with regular rice during the milling process to create fortified rice, which serves as a crucial tool in combating malnutrition across vulnerable populations.
The standard procurement and fortification process involves paddy being collected at mandis, then transported to FRK millers for fortification. Subsequently, the fortified grains proceed to custom rice millers (CRMs), who mill the rice and blend it with FRKs before delivering the final product as custom milled rice to government distribution systems.
Mid-Season Policy Shift Creates Confusion
Pungrain re-issued a request for proposal (RFP) on Monday for the empanelment of FRK manufacturers who will supply these specialized kernels to rice millers. The corporation has set a deadline of February 5, 2026, for bid submissions.
This development follows an earlier empanelment process in September 2025, when 126 FRK manufacturers were approved to supply fortified rice kernels for the kharif marketing season 2025-26. Some supplies had already commenced under this arrangement.
Industry sources reveal that the decision to restart the empanelment process stems from manufacturers' reluctance to supply FRK at the previously fixed price of Rs 39.48 per kilogram. This resistance was reportedly affecting the supply of rice to the national food security pool, prompting the department to seek new bids at revised prices.
Rice Millers Express Confusion and Concern
The mid-season policy change has created what rice millers describe as a confusing situation regarding supplies at previously agreed prices. Many millers had already placed orders with FRK manufacturers, which were accepted and paid for under the earlier approved rates.
Prem Goyal, president of Akhil Bhartiya Sheller Sangh, highlighted the uncertainty prevailing among rice millers about whether previously accepted orders would be honored. "The department should clarify the status of previous orders, as millers wanted supply of FRK against orders already placed, accepted, and paid for at the earlier approved rate," he emphasized.
Goyal further invoked legal principles, stating, "As per Section 10 and Section 37 of the Indian Contract Act, 1872, once an offer is accepted and consideration is received, a valid and enforceable contract comes into existence, which is binding upon both parties. Issuance of a fresh tender, by itself, does not extinguish or override pre-existing concluded contracts, unless the earlier orders are expressly cancelled through a written and reasoned order by the competent authority."
Government Clarifies Position on Supplies
Punjab's Food and Civil Supplies Director, Varinder Sharma, provided clarification when contacted about the situation. He stated that the standard operating procedure (SOP) regarding FRK supply would continue until the new L1 bid is accepted and manufacturers are empaneled through the fresh process.
"The SOP will be reviewed after February 5, and until then all FRK manufacturers are bound to supply FRK until the issuance of the 'letter of award' under the new RFP," Sharma explained. He assured stakeholders that "no disruption in supplies will be allowed, and appropriate action will be taken against FRK manufacturers violating the SOP, and there is no confusion about it among the rice millers."
The timing of this policy shift, occurring during the peak of the kharif marketing season when rice procurement and processing activities are at their height, has particularly concerned trade participants who worry about potential disruptions to the supply chain and contractual obligations.
