SAO PAULO – Brazilian meat giant JBS SA (OTC) lowered the impact of COVID-19-related China lockdowns, stating that it would not affect JBS product demand, despite raising logistical issues.

Inventory levels rose in America during the first quarter due to logistic issues. U.S. ports were also affected, increasing the costs of that unit which is the biggest within the company.

JBS stated that China remains a potential long-term importer of beef due to its high per capita consumption.

JBS reported a profit in the first quarter that exceeded expectations despite higher global grain prices. China’s pork exports were lower than expected. The U.S. beef business performed well.

Shares rose by 1.7% in early trading in São Paulo but later pared nearly all gains at 35.76 reais.

Citi analysts reiterated their buy rating and increased the target price of the stock to 50 reais each share following the quarter’s results.

Credit Suisse analysts said they remain positive on JBS’s investment case, as they believe “operating momentum will remain solid in the coming quarters.”

Credit Suisse, however, sees decreasing cattle availability in America which is putting pressure upon fat steer prices.

They said that this should be balanced by strong U.S. beef demand, especially as Americans begin barbecue season.

JBS recognised a difficult situation in Brazil as its main market and grew sales by double-digits across all units.

Due to high unemployment in South America, the 12.1% annual inflation rate for April was 12.1%.