Food prices have fallen for a second consecutive month, the UN Food and Agriculture Organisation revealed on Thursday.

The FAO Food Price Index fell in May, as cereal and dairy prices eased from the 10-month high hit in March. In late winter and early spring, concern over drought in North and South America, as well as geopolitical tensions in the Black Sea region led prices to escalate, but news of ample food supplies and good production prospects from many of the world's main agricultural regions have eased concerns in recent months.

The Food Price Index, based on the prices of a basket of internationally-traded food commodities, fell 1.2 percent from April to May; prices were 3.2 percent lower than their May 2013 levels. However, movements over recent months, similar as they are to the response to the US drought of 2012, though not as severe, show that, though prices can spike rapidly, they are slow to ease.  

The price decline in May was led by maize prices, which fell in response to favourable growing conditions and good supply prospects in 2014/15. Wheat prices, which had contributed to price increases in previous months, partly amid fears of disruptions to trade flows from Ukraine, also fell.

"We went into May with concerns over unfavourable weather conditions, especially in the US, and geopolitical tensions in the Black Sea region, but towards the second half of May, we began to see lower wheat prices following improved weather conditions and the continuation of regular shipping patterns from the Ukraine," said FAO Senior Economist Abdolreza Abbassian.

In the index, vegetable oil prices fell by 1.8 percent from April, led by palm, soy and rapeseed oils. Dairy prices fell 5 percent over the course of the month, though meat prices remained virtually unchanged. In contrast to the general trend, sugar prices rose, due to El Niño-related weather concerns.

FAO reported that cereal production is forecast to reach 2,480 million tonnes in 2014. Though this is still 1.4 percent below the record 2013 harvest, it represents a rise of 1 percent on May estimates.

The increase reported in June mostly reflects improved outlook for maize crops from the United States, Argentina and Brazil. Wheat production is also forecast marginally higher.

The forecast for world cereal stocks by the close of crop seasons ending in 2015 has also been raised, by almost 10 million tonnes since May, to 576 million tonnes. Based on the latest forecast, the global cereal stocks-to-use ratio could reach a 10-year high of 23.1 percent, up marginally from 2013/14.