Addressing a conference of state food ministers, Jaitley asked the state governments to take tough action against hoarders.
"When production of food items is higher than last year and still prices rise, then it means that intermediaries are keeping the stock somewhere," Jaitley said.
The finance minister said expectations of poor monsoon have led to hoarding. "There are reports of below normal monsoon this year. Hoarders are taking advantage of the situation," he said.
Jaitley along with senior cabinet colleagues Food Minister Ram Vilas Paswan and Agriculture Minister Radha Mohan Singh, discussed with state food ministers measures to check price rise.
Spike in prices of some food items, especially onions and potatoes, has become a big challenge for Prime Minister Narendra Modi's government.
The government earlier this week hiked the minimum export price of onions by 67 percent and brought the vegetable under the Essential Commodities Act, with a view to curb hoarding and increase availability in the domestic markets.
Jaitley, however, said that there is no panic situation as far as the price of onions is concerned as it remained relatively under control.
He pointed out that onion prices soared to Rs.70-100 per kg last year, while prices are much lower this year.