The index averaged 175.8 points in November, down 0.5 per cent from the previous month while still up 2.3 per cent from a year earlier.

FAO also revised upward its global cereal forecasts and now expects worldwide supplies to rise to nearly 3,331 million tonnes, an all-time high.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.

The November decline was driven by a 4.9 per cent monthly drop in the FAO Dairy Price Index, as quotations for butter, cheese and whole and skim milk powders all fell.

By contrast, the FAO Sugar Price Index jumped 4.5 per cent on the month, due mostly to a drop in exports from Brazil and concerns that firmer oil prices may lead more production to be used for producing ethanol.

The FAO Vegetable Oil Index also rose 1.2 per cent during the month, led by higher soy oil prices, while palm oil values declined due to higher-than-expected stock levels in Malaysia.

The FAO Meat Price Index was broadly unchanged as bovine meat prices rose and pigmeat quotations declined.

The FAO Cereal Price Index registered a small rise in November, led by a 1.1 per cent increase in international rice quotations.

Higher cereal production and inventories

FAO sharply raised its forecast for global cereal production to 2,627 million tonnes, some 13.4 million tonnes higher than its October projections, with the bulk of the increase mostly reflecting higher estimates for maize yields in the United States and a significant increase in maize plantings in Indonesia.

Global wheat production is now forecast at 754.8 million tonnes, while rice output is projected at 500.8 million tonnes, both just a notch below their 2016 record levels.

World cereal total utilization is now expected to increase by 1.2 per cent in 2017/18 season, reaching 2,599 million tonnes, with more rice and wheat being destined for direct human consumption and more coarse grains used for feeding animals.

World cereal inventories are set to rise to a record-high 726 million tonnes, according to the latest FAO projection. Global wheat and maize stocks are both expected to reach record levels.

Large stocks are seen to lift the global cereal stock-to-use ratio to 27.3 per cent by the end of the 2017/18, its highest level in 16 years.

You can view the latest FAO Food Price Index by clicking here.