By Hugh Bronstein and Tom Polansek
BUENOS AIRES/CHICAGO, Sept 11 (Reuters) - Argentine soyfarmers and crushers expect a boost in demand next year afterthe South American grains giant won long-sought approval fromChina to export soymeal to the world's biggest consumer of thelivestock feed.
Argentina, the top international supplier of soymeal,announced on Tuesday that China would allow imports for thefirst time following decades of talks. It was a breakthroughamid a whipsawing trade war between Washington and Beijing thathas hit U.S. growers.
The deal, formalized in Buenos Aires on Wednesday, paves theway for Argentine farmers and soy processors to send shipmentsto China from early 2020 once required plant approvals andregistrations have been made, a fillip for the world's dominantsoymeal producer.
"This news is huge for our country given the magnitude andpotential of the new market," the Rosario grains exchange said.The majority of Argentina's soy is grown and crushed in the areaaround Rosario, on the banks of the Parana River.
"(It) will allow exports to the Asian country to kick ineffectively from next year."
China consumes an estimated 67.3 million tonnes of soymealeach year to feed its giant hog herd, the Rosario exchange said,though it has imported only small amounts of the processed soyproduct, preferring to crush the beans domestically.
This has meant that while China has been the top buyer ofraw Argentine soybeans, it has long resisted opening up tosoymeal. Argentina's top export markets for the feed arecurrently Europe, Vietnam, and Indonesia.
Gustavo Idigoras, president of Argentina's CIARA-CEC chamberof grains exporting companies, said he did not expect Argentinato "export an important volume to China in the first year."
"But for us, having 2 or 3 million tonnes in the market in2020 would be symbolic in terms of building confidence anddeveloping future business," he said.
MESSAGE FOR TRUMP
Argentine soy industry insiders said the U.S.-China tradewar had helped make Argentine soymeal exports more alluring asBeijing looks to diversify its supply and to send a message tothe United States that it had other options on the table.
The pact, which came together faster than many expected,could help local crushers make up lost ground on U.S. rivals,who have benefited from lower domestic prices linked to a glutof U.S. beans. U.S. farmers, meanwhile, lamented the deal.
"Of course we're sorry to see it," said Ron Heck, a corn andsoy farmer in Perry, Iowa, adding he expects that China may paymore than world market prices for Argentine soymeal to avoidbuying crops from the United States.
"China has shown a willingness to pay extra to punish theUnited States, which falls on me."
Max Fisher, director of economics and government relationsfor the U.S. National Grain and Feed Association, said the dealshowed China was looking to avoid U.S. soybeans.
"It tells me China is attempting to avoid soybeans and gainleverage in the trade negotiations by having an additionalsupply of soybean meal available to their livestock industry."
Argentina could export a total 31 million tonnes of mealfrom beans harvested in the upcoming 2019/20 season. The amountChina will take is still unclear, depending on demand linked toswine flu currently hitting the country's hog herd and Beijing'spolitical will to shift away from local supplies toward imports.
FIRST SHIPMENTS NEXT YEAR
Santiago del Solar, chief of staff to Argentina'sagriculture minister, said the deal was "simple good news."
"We know that last year the possibility of selling soymealto China was zero. Now we've opened the market, which is goodfor the whole value chain," he told Reuters. "By the time of ournext soy harvest in March, April and May we hope we will havethe paperwork done and have the first shipments."
Adding China to the mix in 2020 should lend some stabilityto a farm sector hurting from political and economicuncertainty, with business-friendly President Mauricio Macriheading for likely defeat in Argentina's October election.
Front-runner opposition candidate Alberto Fernandez isrunning with Cristina Fernandez de Kirchner, a former presidentwho was locked in an feud with the farm sector over taxes andexport caps during her two terms, between 2007 and 2015.
"Every new market for our flagship product is good for theeconomic health of the country," said Ezequiel De Freijo, headeconomist at the Argentine Rural society, which represents someof the country's biggest growers.
Argentine farmers, worried by the volatile political andeconomic risks, had already said they were likely to boost soyplanting this year over more expensive corn.
(Reporting by Hugh Bronstein in Buenos Aires and Tom Polansekin Chicago; Additional reporting by Maximilian Heath in BuenosAires; Editing by Adam Jourdan, Steve Orlofsky and Tom Brown)