The government banned the export of a rice variety last week because food grain stocks had dropped to a five-year low, with the floods in North India and uncertainties surrounding El Nino adding to the Modi government's concerns before the general elections.

Analysts said assembly elections will be held in Madhya Pradesh, Rajasthan, Mizoram and Chhattisgarh later this year, followed by the Lok Sabha elections. The government would not want the prices of food grains such as wheat and rice to become an election issue.

According to the latest Food Corporation of India data, the central pool stock of wheat and rice on July 1, 2023, stood at 711.04 lakh tonnes, the lowest in five years since July 1, 2018. The stock positions are, however, above the buffer norms of 411.20 lakh tonnes as of July 1.

While it has low stocks in the central pool, it has to meet the commitment under the National Food Security Act.

Pushan Sharma, director-research, Crisil Market Intelligence and Analytics said: “Rice stock with the Food Corporation of India is down a fifth on-year — the government viewed these as red lines from a domestic food security and inflation point of view. We expect a blanket ban to reduce India’s rice exports by 4-5 billion tonnes this fiscal, or more than a fifth of what was exported last fiscal,” he said.