ROME: World food prices rose for a third month running in August, led by coarse grains, vegetable oils and sugar, the United Nations food agency said on Thursday.

The Food and Agriculture Organization's food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 96.1 points last month versus 94.3 in July.

The Rome-based FAO also said in a statement that worldwide cereal harvests remained on course to hit an annual record in 2020.

The agency's cereal price index rose 1.9% in August from the month before and 7% above its value a year earlier.

Among the major cereals, sorghum, barley and rice prices rose the most, FAO said. Maize also climbed strongly, pushed up by concerns over US production prospects following recent crop damage in Iowa.

The vegetable oil price index climbed 5.9% month-on-month, returning to around the levels registered when the coronavirus crisis hit the world at the start of the year.

Palm oil was buoyed by expected output slowdowns in major producing countries, which, combined with firm global import demand, were expected to result in lower inventory levels.

Average sugar prices rose 6.7% from July, reflecting forecasts of a reduction in production due to unfavourable weather conditions in the European Union and Thailand. Strong import demand in China also helped push prices higher.

By contrast, the dairy index was little changed on the month, with falls in cheese and whole milk powder offset by stronger butter and skim milk quotations.