Food inflation shot up to nearly a year’s high of 18.32 per cent on December 25, due to spurt in vegetables, onion and milk prices.

The wholesale food inflation jumped by 3.88 percentage points from 14.44 per cent in the previous week ending December 18, 2010. A huge increase of over 82 per cent in onion prices and 58.85 per cent in vegetables led to the overall increase in food inflation.

The onion prices, which have started rising again after declining for a brief period, may go up again following a Pakistan ban on shipments through land route of Wagha border. The other items that contributed to price rise were egg, meat, fish, fruits and milk. Inflation in the corresponding week last year was 19.90 per cent.

Meanwhile, Finance Minister Pranab Mukherjee said though it is a weekly figure, the government is concerned over the price spurt. Talking to reporters in Delhi, Chief Economic Advisor in the Finance Ministry, Kaushik Basu said the rise in food inflation was expected, but not to the extent of 18.32 per cent.

Experts say, having raised the key interest rates for six times in 2010, the RBI is expected to again hike them in its next policy review on January 25 to cool down inflation. In a related development, former Finance Minister P. Chidambaram raised doubts on Wednesday whether the government has adequate policy tools to tame rising food prices, which erode real family income.