DALIAN - A CORN shortage in North Korea and a bumper harvest across the border in China have triggered an active grain smuggling business, a Chinese official said on Wednesday, even as legal trade has also soared.

International food agencies have warned that North Korea faces an increased risk of famine this year and next as it is unable to supply itself with enough grain even in a good year.

Denuded hillsides make the isolated country vulnerable to flooding, while a deterioration in infrastructure can compound the effects of drought.

'The drought in North Korea was very serious, and there is a lot of corn smuggling from China into North Korea,' said Mr Zhu Yehui, the head of the grains bureau of Jilin, the Chinese province bordering North Korea.

'The price in North Korea is more than 10 times the domestic price in China.'

China effectively stopped exporting corn and wheat at the beginning of this year to control domestic inflation, but makes an exception for North Korea, Taiwan and Hong Kong.

According to official Chinese customs data, exports of corn to North Korea soared to 97,606 tonnes in the first seven months of the year, a rise of 564 per cent.

North Korean imports were strong in the late winter, implying that the 2007 harvest was insufficient, dipped in the spring, and then rose to 37,111 tonnes in June, the highest monthly level this year.

North Korea accounted for almost all of China's corn exports this summer. In August, China exported 30,000 tonnes of corn, although the amount sent to North Korea has not yet been released.

The UN World Food Programme said earlier this month that China's restrictions on grains exports hampered its ability to source grain for North Korea from China. -- REUTERS