Global food prices declined in May 2014, with dairy prices helping lead the way, according to the latest United Nations’ Food and Agriculture Organization (FAO) Food Price Index.

The May FAO Dairy Price Index dropped 5.0% from April, a second consecutive sharp month-to-month decline. The market for dairy commodities is readjusting following a period of high prices in 2013 and early 2014, caused by limited export supplies. In recent months, the production outlook has improved and, in general, buyers are purchasing only for immediate needs, in the expectation that prices may fall further. Consequently, average prices for all dairy commodities declined during the month.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of five food commodities – cereal, vegetable oil, dairy, meat and sugar. Overall, the FAO Food Price Index was down 1.2% from April. The FAO Meat Price Index was virtually unchanged; vegetable oils declined by 1.8%; with cereals down 1.2%.

The only exception to the downward trend was sugar, up 3.7% from April, amid early forecasts for the 2014/15 season pointing out to a possible production deficit, with El Nino weather likely to exacerbate the fall in output.