UPDATE 1-Argentina to restart beef exports to China after caps lifted

(Recasts with decision from meeting)

BUENOS AIRES, Sept 28 (Reuters) - Argentina on Tuesday said it would once again allow cattle farmers to freely export beef to China, lifting a cap imposed earlier this year that had stoked tensions with the agricultural sector.

The government had capped beef exports at 50% of the normal volumes to tamp down fast-rising prices, leading to protests and threats by farmers to halt local trading in cattle and also grains.

Argentina is the world’s fifth-largest beef exporter while China is the world’s top consumer of the meat. About 75% of Argentina’s 2020 beef exports went to China, according to official numbers.

Farm exports are the country’s main source of much needed foreign currency.

“Regarding the issue of beef meant for China, we will restart exports starting on Monday,” Argentina’s agriculture, cattle and fishing minister Julian Dominguez said following a meeting with leaders of four main agricultural associations.

“This is the message that producers needed,” said Elbio Laucirica, head of the Coninagro agricultural association, following the meeting. “It doesn’t affect the local market.”

Analysts say China primarily buys a beef cut that is not popular in the domestic Argentine market.

Dominguez took over as farming minister earlier this month after the government of center-left President Alberto Fernandez badly lost a congressional primary election, sparking a rift in the ruling Peronist party and a Cabinet reshuffle.

Dominguez convened the official Federal Agricultural Council earlier on Tuesday, where a plan was discussed to bolster the “quantity of available beef” for 2022. (Reporting by Maximilian Heath; Editing by Adam Jourdan, Cynthia Osterman and Richard Pullin)