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UPDATE 3-Argentine beef producers, government in talks to end export ban

(Adds political context, changes headline)

By Maximilian Heath

BUENOS AIRES, June 3 (Reuters) - Argentine meat producers will continue talks with the government aimed at lifting the one-month suspension of beef exports that was declared in mid-May, the country's Agroindustrial Council (CAA) said in a statement.

The suspension is aimed at lowering domestic inflation, but cattle ranchers disagree with the measure and, in protest, halted domestic livestock sales through Wednesday. Farm leaders say the sales strike may resume to include grains sales if progress is not made in talks with the government.

According to the CAA statement, Dardo Chiesa, the coordinator of the Mesa de las Carnes - an association that brings together dozens of entities in the sector - met Wednesday evening with Peronist President Alberto Fernandez.

"The representatives of the CAA agreed with the national authorities to deepen the search for long, medium and short-term consensual policies to correct the situation by promoting the supply of food to meet both domestic and export market demand," the CAA said in the statement.

It said Fernandez "expressed the need for a quick solution and understanding for domestic supply, in order to lift the export suspension measure."

The government and the meat sector were serious about seeking an agreement, according to a source from the president's office, who had direct knowledge of the meeting but asked not to be named due to the political sensitivity of the issue. "It was important, the gesture that they asked for a meeting to seek dialogue. So was the gesture of the president, who received them almost immediately," said the source. "They agreed to keep talking and look for a way out of this problem."

Argentina is the world's No. 5 meat exporter, with most of its shipments destined for China.

The country, in recession since 2018, has had high inflation for years. According to official data, Argentina experienced a 17.6% increase in consumer prices in the first four months of this year and a 46.3% rise over the last 12 months.

With congressional elections looming at the end of the year, beef prices are a sensitive political issue in a country where grilling meat is considered something of a national pastime.

Farmers halted domestic trade of livestock to protest the meat export suspension. That protest lasted through Wednesday but farm associations said it may restart, and include grains sales, if progress is not made in the talks.

The country's pro-free-markets farm groups distrust the left-of-center Fernandez. Previous Peronist administrations locked horns with the agricultural sector in an all-out growers' strike in 2008 that crippled Latin America's No. 3 economy.

Those political tensions are near the surface of today's debate over state intervention in the meat export market.

(Reporting by Maximilian Heath; writing by Hugh Bronstein; editing by Jonathan Oatis and Aurora Ellis)

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