De Beers Auction Sales introduces forward contract sales

De Beers Auction Sales has introduced forward contract sales. It gives its customers the opportunity to bid for future supply, selecting the type, quantities and time of supplies needed. The new proposition will complement current spot auction events.

Neil Ventura, Senior Vice President of De Beers Auction Sales, said: “Customers have expressed their desire to secure future supply at auctions so that they can plan their activities more effectively and commit to longer term agreements with their own customers. We see forward contracts as the ideal mechanism to deliver this and believe they will be a valuable addition to our customer offering”.

During the recent first forward contract auction event, registered customers of De Beers Auction Sales bid for future supply up to three months in advance. The facility enabling one to bid for future supply of rough diamonds over a 12 month period will be introduced in 2014.

The purchase price for the required volume of rough diamonds in a forward contract will be determined by a customer’s bid relative to the spot price for the same type of goods at the De Beers Auction Sales spot auction event when the contract matures.

Approximately 10 per cent of De Beers’ rough diamonds are sold through its auction platform.