Secure our raw sugar for the year at the lowest possible price on average to help the Group in minimising production cost The rising trend of raw sugar price and natural gas has made for a challenging year for MSM. The NY11* fluctuated between 14.0 to 20.5 US cents per pound amid concerns of supply shortages from major raw sugar producing countries such as Brazil and Thailand. The forecast is of a continued uptrend towards 21.0 US cents per pound at least until the second quarter of 2022. In the effort to mitigate the risks of increasing costs of MSM’s major raw materials going forward, the Raw Sugar Procurement Department executed its strategic hedging programme on both the NY11 raw sugar as well as Brent Crude Oil. OVERVIEW 2022 PRIORITIES Explore various pricing and hedging mechanisms to better manage the volatility and reduce price risk exposures Note: * The NY11 contract is the world benchmark contract for raw sugar trading and is available on The Intercontinental Exchange (ICE). The size of each contract is 112,000 pounds. The biggest producer and exporter of sugar in the world is Brazil (23% of total production and 49% of total exports). A significant amount of sugar is also produced in India, Europe, China, Thailand and the United States. SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 77
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