JOHANNESBURG – THE De Beers Group, the leading diamond company, will begin piloting fixed-price forward contracts next month.
These contracts will offer the opportunity for auction sales customers to guarantee access to future supply with certainty over the price to be paid when the contract reaches maturity.
The first event will take place on February 16, for the Grainers, Smalls and Near Gem categories of rough diamonds.
Neil Ventura, Executive Vice-President of Auction Sales, says extensive customer dialogue has highlighted potential to further develop the forward market for our rough diamonds.
“Our customers have told us they see value in securing short-term supply contracts but would prefer to do so on a fixed price basis, avoiding potential challenges when securing contracts on a floating price basis that references the underlying spot price at contract maturity.”
Ventura says they are therefore piloting three-month forward contracts on a fixed price basis to complement spot sales.
Since launching forward contract sales on a floating price basis back in December 2013, Auction Sales has steadily developed its forward sales channel, selling more than 350 bespoke supply contracts in total over the period.
The pilot for fixed-price contracts follows other Auction Sales pilots, including those enabling third parties to use its auction platform for rough and polished diamond sales.
– CAJ News