Brazil should end the year at the top of the list of countries with the highest rate of pirated PCs in its market, outranking China for the first time, according to a study released yesterday.

The number of non-brand computers sold in Brazil using black market or illegal components should rise to 74.5% this year, up from 70% in 2003 and 59% in 1999, the study by market research group IDC showed.

China, on the other hand, has been trimming its black market for PCs so that they accounted for 73% of computers sold last year, down from 85% in 1999. IDC did not give a projection for China in 2004, but did say Brazil would dash ahead of it in the ranking.

The pirated PCs use computer components that have been doctored or illegally imported into Brazil. They are then assembled in the South American country by unregistered companies that can outsell their formal competitors by not charging taxes.

Formal computer makers charge on average 3 080 reais, or about $1 074 for a mid-range PC. The black market version costs about 1 000 reais less, IDC said.

Last year alone, the pirate PC market cost the Brazilian government 1.5 billion reais in tax revenue, the research group added.

The US has repeatedly urged Brazil to crack down on black market goods, threatening to suspend trade benefits if it does not adequately address the problem.