After years of being sidelined by punitive taxes on shipments, Argentine exporters of farm products are back with a vengeance and are set to steal market share from Australia as the two agricultural powerhouses go head-to-head in Asia.

The Latin American country's farm sector has been dealt a good hand by new president Mauricio Macri, who since taking office in December has axed most crop and beef export taxes and allowed the peso currency to depreciate about 40 percent, giving its shipments a big advantage in an amply supplied world market.

The country's exporters have responded aggressively and Australian traders are already feeling the heat in the highly competitive Middle Eastern wheat market, where Argentina's supplies have been priced below most other origins.

Argentina has even sent cargoes to the net-exporting United States, underscoring the potential for a more intense price competition in the months ahead, industry sources said.

"Argentina is going to go full throttle, we are already seeing them making very aggressive offers," said Adam Davis, head of commodities at Merricks Capital, a Melbourne-based fund that manages $350 million. "They have sold wheat to the United States, which is having difficulty in cutting its own stocks."

The next target for the South American country is Asia, home to half the world's population and a traditional stronghold for Australia - the world's fourth-biggest wheat exporter.

About 6 million tonnes of wheat will be shipped by Argentina to countries other than Brazil as soon as it lifts planted areas, David Hughes, president of the local wheat industry chamber Argentrigo, told Reuters. That would be equivalent to about 35 percent of Australia's annual exports.

The two countries will also face off in beef shipments.

Argentina is set to ramp up beef sales to a record high this year, a think-tank formed by the country's grains exchanges said, denting exports by the world's No.3 supplier Australia.

The prospect of higher Argentine exports has already taken a toll on global prices, with Chicago wheat futures plumbing five-year lows this month and beef <BEEF-US-CH> hitting two-week lows after sinking 16 percent last year.

The problem for Australia is it relies on sales of the very same farm products as Argentina, but lacks the renewed momentum as tax rates remain stable and its currency holds steady.

Australian traders cannot even boast of a freight advantage as global shipping rates have plunged to record lows, making it easier for Argentina to reach distant markets.

Wheat Exports Doubling

Argentina's wheat exports are expected to more than double to 9.8 million tonnes in the year to June 2017, the think-tank, Institute for International Agricultural Business, told Reuters.

Under the previous government, over 2007-2015, wheat exports had halved due to prohibitive taxes.

"We expect Argentina to get back its former market share," said Argentrigo's David Hughes, also a farmer in the bread basket province of Buenos Aires. "We are expecting a huge growth in wheat acreage."

Australia, which has just finished harvesting its near 25-million-tonne wheat crop, fears it will lose share in Asia.

"Indonesia is looking at Argentina for wheat exports," said an Australian trader at a grain trading house.

Argentina could sell 500,000 tonnes to Indonesia, chipping away at Australia's exports to the world's No.2 importer that typically come in at 3.5 million tonnes, the trader added.

More Beef

Argentina is also expected to aggressively export beef this year, with the think-tank forecasting a five-fold jump in sales to an all-time high of 1.3 million tonnes in 2016.

"Argentina is now free of foot-and-mouth disease, so we can enter Asia as soon as we increase our herd," said one Buenos Aires-based analyst. "Argentina has approved sanitary protocols with China in meat and dairy products, this will be direct competition for Australia and New Zealand."

Australia is expecting its first decline in beef sales since 2013 after slaughtering nearly 30 million head of cattle in the last few years as a severe drought wilted pastures.

"Argentina has great scope to increase beef exports. With currency devaluation, South American supplies are now very attractive," said Phin Ziebell, agribusiness economist, National Australia Bank.