The FAO said its annual Food Price Index averaged 209.9 points for 2013. While that marked a 1.6-percent drop from 2012 levels, it was still the third highest value on record.

The full-year results came after prices remained virtually unchanged in December, with a sharp increase in dairy prices and a steep decline in cereal prices cancelling out each other, the organization remarked.

"Last month, our index remained elevated as strong demand for certain high-protein foods continued to drive prices up, countering falling prices of major crops after last year's abundant harvests," the FAO said in its report.

Sweet and cheap

Sugar prices in December dropped sharply by 15.8 points month-on-month, marking the third consecutive monthly decline.

FAO said the reason for the renewed dip had been a bumper sugar harvest in Brazil, the world's largest producer and exporter of the sweet substance. Adding to the downward pressure had been reports of record production in Thailand as well as similarly good harvests in China.

The World Food and Agriculture Organization pointed to growing demand for milk powder, with processors in the southern hemisphere increasingly focusing on that product rather than on butter and cheese.

hg/hc (Reuters, dpa)