According to the report of the UN’s Food and Agriculture Organization (FAO), in May 2014 food prices around the world fell for the second consecutive month due to reduced cost of dairy products, grains and vegetable oil.

During last month FAO’s Food Price Index fell to 207.8 points, down by 1.2% since April and 3.2% since May of last year.

According to Fronterra Cooperative Group Ltd, food continues to cheapen after prices have reached their record high in February, along with rising production of dairy goods in New Zealand, world’s largest dairy product exporter, by 7.7% for 10 months until April.

Prices for dairy products fell by 5% during May after falling 6.3% in April; the price index for them is 238.9 points.

During May the price index of grain was 204.4 points, which is 1.2% below April’s indicator. Decreasing price reflects the expectation that the increase of wheat yield in Europe will compensate for the reduction of wheat harvest in the United States.

In addition, FAO has also raised its forecast for the U.S. corn harvest in 2014 by 15 million tons- up to 345 million tons, and the forecast of world grain harvest by 21.6 million tons- up to 2.48 billion tons.

In May, the price index for vegetable oils fell by 1.8% and was 195.3 points, while palm, soybean and canola oils became cheaper.

Meanwhile, in May the price index for sugar rose by 3.7% to 259.3 points, amid fears of shortage of this product in 2014-2015.

Level of meat prices remained virtually unchanged since April, reaching 189.1 points.