Milan: World food prices are likely to fall again after sliding in September under pressure from increased grain supplies and lower demand, the UN said on Thursday.

Better prospects: Wheat ready for harvest in Canada. FAO says crop acerage is likely to rise this year. By Todd Korol/Reuters

“It is likely that the prices will remain under a downward pressure for some time," Abbassian said in an interview after the FAO said its global food price index fell 2% in September from August as cereal crops outlook improved.

“I think volatility will remain with us, unfortunately...We are in for a very bumpy period ahead," Abbassian added.

World food prices came into the limelight after they hit record highs in February and were a factor in the Arab Spring wave of unrest in north Africa and the Middle East.

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 225 points in September, 4.5 points down from August due to fall in grain, sugar and edible oils prices. The September Index was 13 points below the 238 points peak hit in February, when it triggered fears of a repetition of the 2008 food crisis which sparked riots in some poor countries.

Global food prices have fallen back in the last few months, and a drop in September mirrored the situation on the main commodities markets, Abbassian said.

Investor concerns about a global economic slowdown which may undercut demand helped fuel a sell-off on international grain markets in September.

Benchmark US corn futures plunged 23% in September— the biggest monthly drop in more than 15 years—also hit by larger-than-expected supplies announced by the US government.

In its Crop Prospects and Food Situation, the FAO has raised its 2011 cereal output estimate to 2.31 billion tonnes, 3 million tonnes above its previous view, driven by a 4.6% annual rise in global wheat production to 685.2 million tonnes on the back of better crops in Europe and Asia.

Cereals output in Russia, which was hit by a severe drought last year, is expected to jump 46% to 87.6 million tonnes in 2011, the FAO said. Russia’s prime minister Vladimir Putin said on Wednesday the country would harvest 95 million tonnes of grain this year. Looking ahead, FAO said wheat planting conditions were generally favourable in the northern hemisphere, apart from the US, and given attractive prices, farmers are expected to keep similar planted areas or increase them.

Global rice output is expected to increase 3% this year and world production of coarse grains such as maize and barley is seen rising 2.1%, the FAO said.

But it also said world cereal markets were likely to remain fairly tight in 2011 and 2012. “Despite the expected production gains, ... because of the slowdown in the global economic recovery and increased risks of recession, there is uncertainty as regards the impact on world food security," the Rome-based agency said.