China's pork market may undergo dramatic fluctuations next year due to unstable production, according to Wang Zhicai, the Ministry of Agriculture's livestock husbandry division director.

"While the pig population's subsequent rapid increase might lead to a temporary surplus of pork, rising feedstuff and fuel costs might diminish the industry's profitability. Without the adoption of proper measures, this might lead to a new wave of market fluctuations," said Wang.

China's pork prices had skyrocketed when the blue ear disease cuts sharply into the country's pig population last year, while domestic pork prices had nearly doubled since last summer due to rising costs and short supplies.

Pig population have rebounded, thanks to government subsidies, with official statistics indicating a rise to 470 million pigs in the first half of the year, up 10 percent on-year.

Market analysts opined that the pork market would be saturated by year-end, with prices highest around Spring Festival before falling to a low point in the second half of 2009.

Pig farmers should reduce the number of sows in advance of the festival to prevent sharp price decreases, according to the analysts.

The Ministry of Agriculture said pork prices have been continuously falling since January. Prices have declined 13 percent on average, with the current average price in major markets around RMB 20 per kg, down RMB 3 from January, the Ministry said.

The ministry added that pig farmers could now make a profit of RMB 160 per 100 kg on average, less than half the RMB 400 they earned at the peak season at the end of 2007.

China consumes about 50 million tonnes of pork annually but the consumption fell to 42 million tonnes last year due to severe shortage caused by the blue ear disease. Pork consumption is estimated to reach 46 million tonnes this year.