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BUY/SELL CONTRACTS

We at Commodities Online use buy/sell agreements to facilitate all our commodity transactions. We sometimes refer to these arrangements as “pre-sold contracts”. A pre-sold commodity contract is actually two related contracts whereby a wholesaler negotiates a sale price for a commodity with a buyer while negotiating the purchase price for that commodity with a producer. This is done to try to lock in a profit on the wholesaling transaction.

When we have a buyer for a particular commodity, we look at their purchase requirements. We first review the buyer’s criteria such as quantity, quality and mineralogical or chemical breakdown. Since many of the commodities we deal with come from the ground, there is usually an acceptable mineral or chemical range. To ensure compliance of the buyer’s criteria, Commodities Online uses world leading mineralogical analysis companies such as Societe General de Surveillance (SGS).

After we have the buyer’s requirements, we then search for a producer that can fulfill the specific requirements. We evaluate and inspect the producer’s operations. Equipment, infrastructure, organization and most importantly the product are analyzed. Once it is determined the producer can meet all of the buyer’s criteria, Commodities Online enters into contractual agreements with both the producers and the end users, thereby completing our buy/sell arrangement.

Having handled numerous large transactions in the difficult commodities markets, Commodities Online knows how important careful due diligence, preparation and confidentiality are. In this section of the COL web site you will find the accompanying documentation that supports this chain of events. As this material is highly sensitive, and we are subject to confidentiality agreements with our producers and buyers, certain information has been redacted.

PLEASE CLICK ON THE BUTTONS BELOW FOR EXPLANATIONS AND PAST DEAL EXAMPLES

BILLS OF LADING

LETTERS OF CREDIT

PRODUCER & BUYER AGREEMENTS

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