* Australia minister says deal to be worth as much as A$2 bln
* Agreement to help ease Chinese red meat shortages
* 40,000-50,000 cattle likely to be exported initially-minister (Adds details, quote)
By Colin Packham
SYDNEY, July 20 (Reuters) - Australia said on Monday it has sealed a deal with China to export live cattle to the Asian country for the first time, with the trade likely to be worth as much as A$2 billion ($1.5 billion) annually over the next decade.
A deal was agreed in principal last year but had been held up by Chinese concerns over the potential risk from the insect-borne Bluetongue virus to its sheep flock.
But after months of talks between bio security experts in the two countries, rules to minimise the risk of the disease had been agreed, Australia's Agricultural Minister Barnaby Joyce said.
"Over the past five years we've had a significant trade in breeder cattle with China, primarily for dairy heifers. Now, I'm pleased to announce we are a step closer to the commencement in trade in live slaughter and feeder cattle to China," said Joyce.
The deal will help ease shortages of red meat in China, analysts said, while also opening a lucrative market for the world's fourth-largest beef exporter which recently saw its top buyer Indonesia slash import quotas by more than 80 percent.
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Private exporters and importers will need to meet the new rules before trade can start but Joyce told Reuters the deal was likely to initially see the export of between 40,000 - 50,000 cattle to China. ($1 = 1.3556 Australian dollars) (Editing by Ed Davies)