The May Price Index score averaged at 166.8 points – slipping by 1.4% from April and more than 20% down over the same time last year.
According to the FAO, the decline was driven by a 3.8% monthly drop in the cereal price index, a 2.9% fall in the dairy price index and a 1% drop in the meat price index. Sugar prices rose by 2% - with temporary delays in Brazil's crushing season blamed for prices rises - despite abundant supplies. Meanwhile, the vegetable oil price index rose 2.6%, partly driven by concerns that the strengthening of El Niño conditions may affect production in Southeast Asia.
The United Nations (UN) organisation also said it has also upgraded its May 2015 forecast for global production of wheat, coarse grains and rice - anticipating bigger maize harvests in China and Mexico as well as more abundant wheat harvests in Africa and North America.
According to its latest Cereal Supply and Demand Brief global rice output is predicted to grow by 1.3% from last year mainly thanks to increases across Asia. However, the forecast is still subject to much uncertainty, as the outcome of the season will very much depend on the unfolding of the season in the next few months, said the FAO.