World food prices in August hit their lowest since September 2010 as prices of all major food groups except meat fell led by a sharp decline in dairy prices, the UN's food agency said on Thursday.

The Food and Agriculture Organisation's (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 196.6 points in August, down 3.6 percent from July.

A Russian ban on dairy imports from countries which have imposed sanctions on Moscow over the conflict in Ukraine pulled down dairy prices which were already falling, FAO said.

The dairy index fell 11.2 percent month on month and 18.9 percent year on year, while the overall price index slid 3.9 percent below August 2013.

FAO raised its forecast for global cereal production for 2014 to 2.512 billion tonnes, 14 million tonnes higher than its previous forecast. That put 2014 output on track to be just 0.5 percent short of last year's record harvest.

The agency also hiked its world wheat output forecast to 716.5 million tonnes, close to 2013's record level, from a previous estimate of 707.2 million due to larger-than-expected crops in China, Russia, Ukraine and the United States.

World cereals stocks at the end of the 2015 season are set to be 616 million tonnes, 12 million tonnes above the previous forecast.

Meat prices bucked the trend to rise 1.2 percent on the month as demand in China supported imports and herd rebuilding in Australia reduced exportable supplies of beef.