Costlier potatoes and pulses pushed food inflation higher to 17.56 per for the week ended January 23 and economists expect prices to rise further in the next two to three weeks.
This is the second week in a row that food inflation has increased, after easing for three successive weeks.
For the week ended January 16, it stood at 17.40 per cent. Food inflation, which was easing after touching decade's high of about 20 per cent in December, rose mainly because potatoes became dearer by 44.91 per cent and pulses by 44.43 per cent over the previous year.
According to economists, food inflation could rise in the next two to three weeks and thereafter it could moderate.
"Because of poor monsoon, food inflation may rise in the next two to three weeks, though the increase would be marginal.
"However, on expectations of good Rabi harvest, it could fall thereafter," Axis Bank economist Saugata Bhattacharya said.
He expects that overall wholesale inflation could rise to 8-9 per cent by March from 7.31 per cent in December.
"This 8-9 per cent range is without factoring in the hike in fuel prices. If fuel becomes dearer, overall inflation could touch 10 per cent by end of this fiscal," he added.
On the weekly basis, the index for food articles declined by 0.1 per cent, mainly due to lower prices of tea (5 per cent), arhar (3 per cent) and urad, fruits & vegetables, ragi and eggs (1 per cent each).
However, prices of coffee rose by 5 per cent, gram by 2 per cent, while wheat, moong, barley and jowar moved up by 1 per cent each over the previous week.
The index for non-food articles group declined by 0.5 per cent due to lower prices of groundnut seed and raw rubber.
HDFC Bank economist Jyotinder Kaur said, "On the weekly basis, food prices have moderated. However, food inflation is expected to be higher in coming days."
She further said that fuel price inflation is the main concern.
It has increased by 0.2 per cent on weekly basis due to higher prices of light diesel oil and furnace oil.On Wednesday, an expert group headed by Kirit Parikh suggested freeing of petrol and diesel prices and raising LPG rates by Rs 100 per cylinder and kerosene by Rs 6 per litre.
Freeing petrol and diesel prices would result in an increase of Rs 3 per litre in petrol prices and Rs 3-4 in diesel prices.