Global sugar prices have dropped back thanks to the prospect of increased production in Europe, India and Thailand, the Food and Agriculture Organisation (FAO) has said.

Sugar prices on the FAO index dropped by 3.8% between August and September, the FAO said late last week. The index is down by 5% from the peak it reached in July.

Better-than-expected sugar output in Brazil, the world's largest sugar producer, also contributed to the easing in prices, the FAO said.

In its monthly update, the US Department of Agriculture (USDA) said it expects US cane sugar production to increase by 5.8% to 3.4m short tons, raw value (STRV) for the full-year 2012. A US short ton is equivalent to 2,000lbs and is different to a UK long ton, which is equivalent to 2,240lbs.

The predicted increase is as a result of the return to a normal crop in Florida, the USDA said.