Concerned over rising food prices, Finance Minister Pranab Mukherjee has asked states to take immediate steps to remove supply side bottlenecks and bridge the gap between wholesale and retail prices.

“It has moved further. It is an area of concern,” Mukherjee told reporters in New Delhi.

“The state governments need to ensure that all bottlenecks in the supply chain are removed so that food prices can be brought down quickly,” Mukherjee said.

Soaring onion and other vegetable prices led to a sharp rise in inflation at 18.32 per cent for the week ended 25th December, up from 14.44 per cent recorded in the previous week.

Mukherjee said a large part of price rise is due to the widening gap between the wholesale and retail prices and the growing demand for these products due to rising income levels.

During the week prices of vegetables rose by 58.58 per cent in the wholesale market.

Among individual items, onion became dearer by 82.47 per cent on annual basis, while egg, meat and fish became costlier by 20.83 per cent, fruits by 19.99 per cent and milk by 19.59 per cent.

Mukherjee said that much of this inflation has been due to the significant increase in the prices of a few primary items like fruits and vegetables, milk, meat, poultry, eggs and fish.

However, Mukherjee added these were weekly variations and December month figure is yet to come before a final assessment could be made.

“These are weekly (figures). Let us wait for monthly figures. These are weekly variations, but is a matter of concern,” he added.

The overall inflation in November was 7.48 per cent, from 8.58 per cent a month ago.