Risk of Raw Sugar Prices and Exchange-Rate Fluctuations and Inability to Pass Through Costs

「Profit increased because we continued sales focused on profitability, among other factors.」

「Imported raw sugar, the raw material for refined sugar, and the energy and materials used in its production are subject to price fluctuations driven by overseas commodity markets and foreign exchange rates.」

「As a Group, our highest priority is to fulfill our social responsibility by ensuring a stable supply of safe sugar, an essential commodity, to consumers. At the same time, we will pursue favorable raw-material procurement conditions and reflect higher costs in selling prices, while managing the business with an emphasis on profitability.」

「Overseas raw sugar prices began in the high-18-cent range per pound and rose to the mid-19-cent range, the fiscal-year high. Prices then fell to the mid-14-cent range, the fiscal-year low, due to uncertainty about the global economic outlook following the announcement of the US reciprocal tariff policy and expectations of increased production in major producing countries. Prices subsequently recovered on physical demand and ended the current interim consolidated accounting period in the low-16-cent range.」

「Profit rose substantially because the company advanced the pass-through of higher costs into selling prices and was able to procure raw materials on favorable terms.」

「Profit rose substantially because the company advanced the pass-through of higher costs into selling prices and was able to procure raw materials on favorable terms. As a result, total revenue for the Sugar segment was ¥41,446 million, up 8.0% year on year, and segment profit was ¥5,007 million, up 95.7%.」

「Overseas raw sugar prices began at 22.35 cents per pound and rose to the mid-27-cent range in late April amid concerns about logistics disruptions caused by increased grain exports from Brazil, a major producer. Prices temporarily fell to the 21-cent range as production and exports from Brazil progressed smoothly, but rose again after India announced a sugar export ban amid concerns about reduced production, reaching the fiscal-year high of 28.14 cents in early November. Prices then fell sharply amid expectations of a substantial increase in exports from Brazil, ending the third quarter at 20.58 cents.」

「Revenue increased as the 伊藤忠製糖株式会社 Group was newly added through the business integration and the company advanced the pass-through of higher costs into selling prices. Profit rose substantially as the profit of the 伊藤忠製糖株式会社 Group was added and the company was able to procure raw materials on favorable terms.」

「Overseas raw sugar prices began at 22.35 cents per pound and rose to the fiscal-year high of 27.41 cents in late April, driven by concerns about logistics disruptions caused by increased grain exports in Brazil, a major producer, as well as growing concerns about reduced production due to droughts in India and Thailand. Prices then fell to the fiscal-year low of 21.81 cents in late June as production progressed smoothly in Brazil, before ending the first quarter at 22.89 cents. Revenue increased as the 伊藤忠製糖株式会社 Group was newly added through the business integration and the company advanced the pass-through of higher costs into selling prices. Profit rose substantially as the profit of the 伊藤忠製糖株式会社 Group was added and the company was able to procure raw materials on favorable terms.」

「On the other hand, profit was below the level of the previous fiscal year due to higher raw material procurement and energy costs resulting from the surge in overseas raw sugar prices, as well as the recognition of expenses related to the business integration.」

「As a result, total sugar shipments exceeded the level of the same period of the previous year, but profit was below that level due to a substantial increase in energy costs, higher raw material procurement costs affected by the weaker yen, and expenses related to the business integration with 伊藤忠製糖株式会社.」

「As a result, total sugar shipments exceeded the level of the same period of the previous year, but profit was below that level due to higher raw material procurement, energy and logistics costs and other factors.」

「Imported raw sugar, the raw material for refined sugar, and the energy and materials used in its production fluctuate in price in response to overseas commodity prices and foreign exchange rates. Product selling prices tend to fluctuate in line with these markets, but price competition against a backdrop of sharply heightened geopolitical risks, changes in the global supply-demand balance, and price surges caused by speculative market movements could make it impossible to pass some or all of the increase in raw material prices on to product prices, affecting our Group’s operating results and financial position.」

「Profit was below the level of the same period of the previous year due to higher raw material procurement costs resulting from the surge in overseas raw sugar prices and other factors.」

「Profit was below the level of the same period of the previous year due to higher raw material procurement costs resulting from the surge in overseas raw sugar prices and other factors.」

「Overseas raw sugar prices began at 14.71 cents per pound and rose to the fiscal-year high of 18.25 cents in mid-May. This reflected stronger commodity markets overall, driven by increased supply uncertainty due to concerns about drought in Brazil, a major producer, and expectations of an economic recovery accompanying progress in COVID-19 vaccinations, particularly in Europe and the United States. Prices subsequently fell as speculative funds flowed out of commodity markets, ending the first quarter at 17.63 cents.」

「Overseas raw sugar prices began at 10.39 cents per pound and fell to 9.05 cents in late April, the low for the fiscal year, amid risk aversion and other factors resulting from uncertainty over the global outlook due to the spread of COVID-19. Prices then turned upward amid supply uncertainty caused by concerns about drought in Brazil and Thailand and concerns over logistics, including higher ocean freight rates resulting from a global container shortage, reaching the fiscal-year high of 18.94 cents in late February.」

「Overseas raw sugar prices began at 10.39 cents per pound and fell to 9.05 cents in late April, the low for the fiscal year, amid risk aversion and other factors resulting from uncertainty over the global outlook due to the spread of COVID-19. Prices then turned upward amid supply uncertainty caused by reduced production due to drought in Thailand, a major producer, and concerns about drought in Brazil, reaching the fiscal-year high of 15.66 cents in mid-November before ending the third quarter at 15.49 cents. Domestic refined sugar prices (Tokyo, as reported in the Nikkei) ended the third quarter unchanged from the end of the previous fiscal year at ¥187–188 per kg for refined white sugar.」

「Overseas raw sugar prices temporarily declined due to concerns about lower consumption associated with the global economic slowdown caused by the spread of COVID-19, a sharp decline in fuel prices and the depreciation of the Brazilian currency, the world’s largest sugar exporter. Prices subsequently rose and ended the second quarter higher due to supply uncertainty arising from reduced production caused by drought in Thailand, a major producer, and concerns about drought in Brazil.」

「Overseas raw sugar prices had been trending upward as expectations of a supply shortage in global sugar markets strengthened against a backdrop of reduced production due to droughts in India and Thailand, both major producers. However, the period ended with prices lower due to stronger signs of a global economic slowdown resulting from the spread of COVID-19, a flight from commodity markets amid risk aversion, a sharp decline in crude oil prices and the depreciation of the Brazilian currency, the world’s largest sugar exporter.」

「Overseas raw sugar prices had been trending downward through the second quarter due to a sense of oversupply and the depreciation of the Brazilian currency, the currency of the world’s largest sugar exporter. They then rose in the third quarter as expectations of reduced production due to droughts in India and Thailand, both major producers, were accompanied by expectations of increased diversion of sugarcane to biofuel production due to higher crude oil prices. Domestic refined sugar prices (Tokyo, as reported in the Nikkei) ended the third quarter unchanged from the end of the previous fiscal year at ¥187–188 per kg for refined white sugar.」

「Overseas raw sugar prices declined slightly during the second quarter due to a sense of oversupply and the depreciation of the Brazilian currency, the currency of the world’s largest sugar exporter, despite expectations of reduced production due to droughts in India and Thailand, both major producers. Domestic refined sugar prices (Tokyo, as reported in the Nikkei) ended the second quarter unchanged from the end of the previous fiscal year at ¥187–188 per kg for refined white sugar.」

「In overseas raw sugar markets, factors supporting higher prices included expectations of reduced production due to droughts in India and Thailand, both major producers. Factors supporting lower prices included ample inventories and concerns about the outlook for overseas economies stemming from US-China trade friction. The first quarter ended with no major changes.」

「On the profit side, although energy and logistics costs increased, sales focused on profitability, together with lower depreciation resulting from a change in accounting policy and lower other expenses, contributed to higher profit.」

「On the profit side, although energy and logistics costs increased, sales focused on profitability in a more stable market environment than in the previous year, together with lower depreciation resulting from a change in accounting policy and lower other expenses, contributed to higher profit.」

「On the profit side, although energy costs increased, lower depreciation resulting from a change in accounting policy, together with sales at appropriate prices, contributed to higher profit.」

「On the profit side, intensifying competition centered on household products, stemming from the sharp volatility in overseas raw sugar prices in the previous fiscal year, high-cost inventory during the sharp decline in product market prices in the first half, and increased expenses, including retirement benefit expenses, reduced profit. As a result, total revenue from the Sugar and Other Foods business was ¥45,184 million, down 2.6% from the previous fiscal year, and segment profit was ¥1,745 million, down 26.5%.」

「On the profit side, intensifying competition centered on household products, stemming from the sharp volatility in overseas raw sugar prices in the previous fiscal year, high-cost inventory during the sharp decline in product market prices in the first half, higher energy costs and increased expenses, including retirement benefit expenses, reduced profit. As a result, total revenue from the Sugar and Other Foods business was ¥35,154 million, down 1.4% year on year, and segment profit was ¥1,638 million, down 27.8%.」

「High-cost inventory when product market prices fell sharply, higher energy costs and increased expenses, including retirement benefit expenses, combined to reduce profit.」

「The import sugar resale price, the standard procurement cost of imported sugar for domestic refined sugar manufacturers, rose by approximately ¥10 per kg year on year. The increase in raw material costs exceeded the increase in selling prices, and segment profit fell 31.0% to ¥528 million due to higher fuel costs, increased retirement benefit expenses and other factors.」

「As a result, total revenue from the Sugar and Other Foods business was ¥46,372 million, essentially unchanged year on year, down 0.05% from the same period of the previous year. However, segment profit fell 10.5% to ¥2,370 million due to higher expenses, including delays in passing on the rapid rise in raw material costs and an increase in retirement benefit expenses.」

「The domestic refined sugar market (Tokyo, as reported in the Nikkei), began the period at ¥187–188 per kg for refined white sugar, then rose by ¥5 to ¥192–193 in late October in response to higher overseas raw sugar prices, ending the third quarter at that level.」

「Imported raw sugar, the raw material for refined sugar, fluctuates in price in response to overseas raw sugar prices and foreign exchange rates. Product selling prices tend to fluctuate in line with these markets, but if price competition or other factors make it impossible to pass some or all of an increase in raw material prices on to product prices, this could affect our Group’s operating results and financial position.」