The domestic Wholesale refined sugar ceiling price was capped at RM2.69/kg for sugar manufacturers. As NY11 and natural gas price increase, sugar manufacturers will experience a margin squeeze. Currently, the Management is engaging the ministry in charge, KPDNHEP, to review the current gazetted ceiling price for 1kg and 2kg retail packs. Natural Gas Price 1Q 1Q 33.65 33.65 33.65 33.65 30.03 36.42 22.14 26.85 Distribution segment (RM/mmBtu) FY2020 FY2021 2Q 2Q 3Q 3Q 4Q 4Q FY2021/FY2022 NATURAL GAS OVERVIEW Gas Malaysia Bhd announced that the average natural gas selling price for the fourth quarter of 2021 beginning from 1 October 2021 to 31 December 2021 is at RM36.42 per million British Thermal Units (MMBtu), compared to RM30.03 per MMBtu for the third quarter of 2021, which translates to a 21% increase. Natural gas makes up 30% of the cost of refining and will post an upside risk in FY2022. In early 2022, the Russian invasion in Ukraine has caused a shock to the global energy supply. Brent Crude Oil prices have surged to new historical highs and the shortage could prevail in the mid term. As a mitigation strategy, the business has embarked on hedging of Brent-linked derivatives. MSM has started hedging the risk of higher Natural Gas prices in late FY2021 via Brent link derivatives contract as part of the mitigation plans. MARKET LANDSCAPE WHO WE ARE STATEMENT & DISCUSSION BY OUR LEADERS HOWWE OPERATE MSM Malaysia Holdings Berhad ANNUAL INTEGRATED REPORT 2021 18
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