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RIBEIRAO PRETO, Brazil, May 3 (Reuters) - It is only May, but if a Brazilian cotton grower orders a new harvester now to cope with an expected larger crop this year, he will not get it in 2019. The industry has run out of them.
Brazil is experiencing a boom in cotton production, a result of higher international prices and the 25 percent Chinese additional import tax on U.S. cotton amid the trade war.
Brazilian cotton exports are expected to increase 35 percent in 2019 to 1.7 million tonnes of the fiber, according to cotton exporters association Anea. Production is expected to grow to 2.64 million tonnes (lint) in the current crop from 2 million tonnes in the previous season, says the government.
"We are still delivering the harvesters ordered last year. Some of them will arrive for the start of the harvest in 60 days, but not all. Some will get to farms mid-way into the harvest, will help them finish field work," Rodrigo Bonato, Brazil sales director for machine maker John Deere, told Reuters during Agrishow, Latin America's largest farm equipment expo.
Deere is the only supplier of the type of cotton harvester Brazilian farmers use in the vast areas in Mato Grosso or Bahia states. It imports the machines from its plant in Des Moines, Iowa. Other manufacturers, such as Case IH, have a different machine that does not suit local needs.
"We can't take any more orders for harvesters to be delivered this year, unfortunately," said Bonato, adding that sales of the equipment to Brazil have grown 30 percent.
The market is relatively small, with only around 800 cotton harvesters produced globally every year. Brazil receives around 150 of them.
Silvio Campos, product market director for Case IH in Brazil, said that besides being small, that market is very variable, depending strongly on international cotton prices.
"We are going through a demand peak that tends to recede from now on. Prices are already falling from the highs seen last year," Campos said. Those characteristics, he said, do not justify an investment in a new assembly line.
Cotton prices last year reached the highest level since 2014, at 92 cents per pound in New York futures, due to stronger demand. Current prices fell to 72 cents per pound, but Brazilian farmers have hedged most of their sales from this year and next already. (Reporting by Marcelo Teixeira; Editing by Dan Grebler)