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China opens soymeal market to Argentina, world's No. 1 exporter

China will allow the import of soymeal livestock feed from Argentina for the first time under a deal announced by Buenos Aires on Tuesday, an agreement that will link the world's top exporter of the feed with the top global consumer.

By Hugh Bronstein and Maximilian Heath

BUENOS AIRES, Sept 10 (Reuters) - China will allow the import of soymeal livestock feed from Argentina for the first time under a deal announced by Buenos Aires on Tuesday, an agreement that will link the world's top exporter of the feed with the top global consumer.

The pact will be signed by Argentine and Chinese officials in Buenos Aires on Wednesday, Argentina's agriculture ministry said in a statement. Last month Chinese officials inspected Argentine soymeal factories in the run-up to signing the pact.

Argentina had tried for years to break into the Chinese market, the biggest consumer of the meal which it uses to feed its hog herd. China, with its own crushing industry to protect, had steadfastly resisted.

The U.S.-China trade war, however, has strengthened Argentina's hand, prompting China to expand its soymeal import options, market sources say.

"This is an historic agreement," Gustavo Idigoras, president of Argentina's CIARA-CEC chamber of grains exporting companies told Reuters. He said all authorizations needed for the start of exports were expected to be done in October. "Immediate shipments are not expected at the moment," he said.

Argentina, the top global exporter of processed soy, expects to export a total of 26 million tonnes of soymeal this year globally, and 8.5 million tonnes of raw beans.

"It is excellent and timely news. Argentina needs to add more value to its exports to China and the world," said Luis Zubizarreta, president of Argentina's ACSOJA soy industry organization that represents farmers, exporters and seed firms.

The pact provided a welcome respite from the bad news that has hammered Argentina's economy in recent months. The country is in recession and inflation is expected at 55% this year.

(Reporting by Hugh Bronstein and Maximilian Heath, Editing by Rosalba O'Brien and Grant McCool)

((hugh.bronstein@thomsonreuters.com; 5411 4318 0655; Reuters Messaging: hugh.bronstein.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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