The United Nation's Food and Agriculture Organization's (FAO) Food Price Index has dropped for the first time after eight months of continuous price spikes, the FAO announced last week.

The Index averaged 230 points in March 2011, down 2.9 per cent from its peak in February, but still 37 per cent above March of last year.

"The decrease in the overall index this month brings some welcome respite from the steady increases seen over the last eight months," said David Hallam, director of FAO's Trade and Market Division. "But it would be premature to conclude that this is a reversal of the upward trend.

"We need to see the information on new plantings over the next few weeks to get an idea of future production levels. But low stock levels, the implications for oil prices of events in the Middle East and North Africa and the effects of the destruction in Japan all make for continuing uncertainty and price volatility over the coming months," said Hallam.