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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 79

NY11 Raw Sugar Price STRIVE FOR CONTINUOUS GROWTH
The process of raw sugar procurement is closely governed by
our Group Trading Policy which is approved by the Board and
aligned with relevant standard operating procedures.
The main challenge managing the volatile global raw sugar
prices to procure the lowest possible price of raw sugar for
the Group. To this end, MSM will continue with the current
hedging methods in which all sales under the Industry and
Exports are hedged back-to-back with the current price of raw
sugar.
2021 February March April May June July August September October November December 2022 Various pricing mechanisms were explored during the year
to better manage the volatility and reduce the price risk
exposure moving forward. MSM has also entered
into contracts of Brent Crude Oil options as a hedging
mechanism against the increasing gas prices.

MAINTAINING MARKET LEADERSHIP ACHIEVING OPERATIONAL EXCELLENCE
Within an environment of escalating costs, MSM’s priority MSM’s established Just-In-Time mechanism continues in
for FY2021 was to secure our raw sugar for the year at the being a key contributor to improve the Group’s profit margins
lowest possible price to help maximise the Group’s profit by maintaining minimal raw sugar stockholding, lowering raw
margins. sugar financing cost and reducing freight as well as reducing
external warehouse rental expenses.
Raw sugar pricing and hedging are guided by the Trading
Committee which is tasked with monitoring the current global
sugar situation and MSM’s hedging positions of our raw
materials namely raw sugar. The Trading Committee meetings
are convened weekly throughout the year towards better,
faster and more informed decision making.
Sustainability Step-Up
The absence of exports subsidy in India, logistical disruptions
due to the pandemic and continued adverse weather MSM and Wilmar Sugar International Pte Ltd
conditions in other major sugar producing countries are
expected to exacerbate the current global raw sugar deficit (Wilmar) have come to an agreement on
outlook and buoy the NY11 price further. sustainable raw sugar supply through
Wilmar’s updated No Deforestation, No Peat,

No Exploitation (NDPE) policy. This ensures
continuous commitment towards a supply
chain free of deforestation and conflict.
Wilmar will start the supply of sustainable
raw sugar in FY2022.