Food markets are more stable and prices for most agricultural commodities are sharply lower than they have been in recent years, according to the latest edition of FAO's biannual Food Outlook report and a new update to the Organization's monthly Food Price Index, both published on Thursday.

Bumper harvests and abundant stockpiles are key factors helping drive down international cereal prices, according to the report.

FAO also said world wheat production in 2014 is forecast to reach a new record.

For coarse grains, prospects for near-record production levels, combined with already-high inventories point to a very comfortable world supply and demand balance in 2014/15, especially for maize. While rice outputs could decline slightly this year, stockpiles remain "huge" and are sufficient to cover over one-third of projected consumption during the 2015-16 period.

All told, world cereal production in 2014 is anticipated to reach 2,523 million tonnes (2.5 billion tonnes) — an upward revision of 65 million tonnes from FAO's initial forecast in May. World cereal stocks should hit their highest level in 15 years by the end of the cropping season in 2015. Expanding soybean production means oilseed forecasts have grown, and a expected to exceed last season's record.

The Organisation's Food Price Index (FPI) registered its sixth consecutive monthly drop — the longest period of continuous decline in the value of the index since the late 1990s. In September, sugar and dairy prices fell most sharply, followed by cereals and oils, while meat remained firm (more from FAO here).

Although prices and prospects look good overall, drought conditions in Central America have significantly reduced the 2014 main first season harvest in key producing countries.

Drought conditions have also been a problem in the Near East, leading to a below-average cereal harvest for the region, while the conflicts in Syria and Iraq and the effects of the Ebola virus outbreak in Guinea, Liberia and Sierra Leone continue to significantly degrade food security, FAO warned.