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High prices of food items, especially onions, led to a sharp spike in India's annual food inflation to 18.32 percent for the week ended Dec 25, compared to 14.44 percent the week before.

The fifth straight week of rise in food inflation rate, based on wholesale prices, was pushed back to double digits in the second week of December, according to weekly data released by the commerce and industry ministry Thursday.

The rise in onion prices, due to a crop failure in the main growing regions, and a consistent rise in rates of other essential commodities like vegetables, poultry, milk and fruits have again raised the chances of a rate hike by the Reserve Bank of India (RBI) in January.

According to Thursday's data, the 52-week inflation rate for non-food articles rose to 22.4 percent for the week ended Dec 25 compared to 21.24 percent in the previous week.

The inflation rate for primary articles increased to a whopping 20.2 percent during the week under review, against a rise of 13.25 percent the previous week.

The index for fuels rose to 11.63 percent for the week ended Dec 25, compared to 10.67 percent in the previous week.

The following are the yearly rise and fall in prices of some main commodities that form the sub-index for food articles:

Onions: 82.47 percent

Vegetables: 58.85 percent

Fruits: 19.99 percent

Potatoes: (-)15.45 percent

Milk: 19.59 percent

Eggs, meat, fish: 20.83 percent

Cereals: (-)0.53 percent

Rice: 1.03 percent

Wheat: (-)5.4 percent

Pulses: (-)10.54 percent

The government has expressed concern over the high price line and assured people that the annual inflation rate will fall to around 5 percent by the end of this fiscal.

An empowered group of ministers on prices headed by Finance Minister Pranab Mukherjee extended the ban on export of pulses indefinitely, and decide to release additional five million tonnes of wheat and rice to be sold through state-run fair price shops.

Earlier, the central bank, in its mid-quarter review of its monetary policy, kept almost all rates intact, but lowered the amount banks have to retain in the form of bonds, gold and cash to ease liquidity in the system.

The move indicated that the RBI was expecting the inflation rate to temper and wanted to make more credit available to industry to ensure that growth does not suffer for want of funds.

But with inflation back in double-digit, the RBI will most likely look to do all that it can on the monetary policy front.

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