FREQUENTLY ASKED QUESTIONS
Find answers to common questions about our service offering
Anyone with a demonstrated involvement in African commodities can register an account for free. REGISTER NOW...
Paid membership includes standard Know Your Client ("KYC") checks in order to preserve the integrity of market counterparties for all members. Individual user accounts are registered to a corporate membership account upon approval i.e. annual market membership includes unlimited user accounts.
Membership is confidential to Viewing and Trading Members, who have access to our proprietary ASM RATING for each registered company. Furthermore, Trading Members need to select credit-approved trade counterparties from a trading members list.
We charge an annual corporate membership fee, which includes several MEMBERSHIP BENEFITS. We also charge circa 20 basis points for all trades brokered on our various platforms, subject to a volume discount. In OTC markets both buyer and seller are charged, whilst only the succesfull winner(s) of an auction or tender is charged.
- ENERGIES (Biomass, Diesel, NatGas & Hydrogen)
- METALS (Tantalum, Lithium, Nickel)
- AGRI (Fruit & Vegetables, Cattle)
- Are your shareholders comfortable that you're getting the best market price? In an opaque world, everyone thinks they have the best pricing. Participation in African Source Markets ensures that you do, by accessing the entire market in one place at any one time.
- Can you reach all possible suppliers and clients / finance opportunities / market indices etc. in one place at one time? Our integrated brokerage and service offering ensures that you can.
- Do you know Who's Who in African commodities? In fact, are you part of the Who's Who? We ensure that our market members are properly vetted and approved, and will make the necessary introductions where requested, bearing in mind client confidentiality on both sides at all times.
Security is a core criteria for us. At a minimum, all data is of course strongly encrypted and transmitted across Secure Socket Layers (SSL). We host our servers in world-class data centres with robust security requirements. Passwords and sensitive data are strongly hashed before being stored.
However, the greatest security benefits come from our active human interaction. We don't expose sensitive data to the public. Instead we actively monitor our server traffic and logs. Our brokers are all real people and we establish healthy, trusted relationships with our clients. In a world of automatons, we actually speak to our clients to verify and protect their information.
- Name Passing Broker on our OTC Marketplace, where we facilitate transactions (online or over phone) between professional market counterparties with matching credit. Prices are negotiated on either a firm (tradeable) or indicative (reference) basis. Once the trade price, volume and terms are agreed, names are disclosed and contractual agreements are enforced between the counterparties. We invoice our brokerage fee in the month that the trade was agreed.
- Dedicated Auctions or Tenders, where we act as an independent facilitator for the host party. We liaise with all invited market participants, arrange for document distribution and receival, and design the auction or tender exactly to client specifications. Finally, we will conduct the auction or tender online (after ensuring proper training sessions) and provide auditable results.
- Trusted and Transparent Price Indices, for standardised commodity grades, as well as world-class research and analysis. No-one knows African commodities like we do and we also offer a trusted Who's Who Database, as well as a renowned Google Earth GIS Database for Africa.
- Integrated Logistics, Warehousing and Shipping Services, accessed when sourcing each commodity on the platform.
- Project and Trade Finance Origination, including suitable global and domestic market counterparty introductions for our members.
- Acclaimed Commodity and Trading Masterclasses, as well as hosting various industry events throughout the year.
As a market member, you get to benefit from our experience, expertise and relationships in all of the above.
Members are able to post either firm or indicative prices and quantities, for the relevant standard grade. Alongside the base price, members can also post a premium or discount price adjustment, accounting for any basis differentials. These would typically include delivery, location and quality adjustments vs. the reference grade. For example, a coal buyer requiring pea sizing would state his requirements and any premium he was prepared to pay for this.
Each member is able to target which counterparties can potentially trade their price, from their credit-approved counterparty list. Our brokers work to assist in closing the 'bid-offer' spread to achieve the best possible market price for both parties. Pricing and trades for further out deliveries inform the forward curve for the relevant commodity for that day.
Market members remain in full control of their prices at all times. Full trade history, credit management, price graphs and order book are also available.
Together with our clients, we assist with comprehensive design of the auction or tender. For example, will participant names / pricing / grades be made available to others, or not? Are prices to be evaluated (usually by custom formula) and displayed in real-time, or only show original pricing? Will there be an extension period? What model will be employed e.g. 1st Price (Sealed), 2nd Price (Vickrey), English or Dutch?
We then work with invited participants to distribute and collect all documentation, ensuring that suitable training is also provided. Finally, we run the auction online and provide auditable results.
All pricing on the OTC marketplace is 100% confidential, thus your market advantage is secured. Your identity is only revealed to your trade counterparty in the case of a confirmed transaction. No other market members know the identity of the parties behind each trade, although they can see the trade information such as grade, price and tonnage.
In the case of an auction or tender, the originating host will decide whether identities will be revealed as part of the process. You will then have the option to participate or not.
Commodity markets by their nature are generally quite changeable. It's almost guaranteed that the same counterparties will not be able to offer the best prices and terms the next time around. Source Markets helps companies expand their sales and sourcing opportunities without the overhead of lengthly bilateral negotiations each time.
CONTRACTUAL & PERFORMANCE
For auctions and tenders, the host will distribute its own contractual terms.
On the OTC marketplace, you can elect to use either Source Market's Master Terms, or your own contractual terms. When approving counterparties for credit, a copy of their intended contractual terms will be made available.
All transactions are confirmed and agreed between the buyer and the seller, forming a legally binding bilateral contract. The contract can only be canceled if both parties agree to do so. African Source Markets does not act as agent or get involved in any contractual or settlement matters. However, in the case of any dispute, and where agreed by the parties, we will try to mediate and resolve the dispute in a mutually acceptable manner.
No. However, we employ extensive measures to minimise the risk of non-performance.
Firstly, we undertake a strict KYC, due diligence and member vetting process, to ensure that only bona-fide counterparties can access the market. The level of due diligence we are able to undertake informs our ASM Credit Rating which we make available to other members.
Secondly, via our market partners we can also offer product sampling and verification services, prior to a transaction being agreed. Market members also have the ability to rate their counterparty to a transaction, thus affecting their overall ASM Credit Rating.
When you register your company as a Trading Member, you have the option of adding your various delivery or storage locations that you have access to. For each transaction, you can then either select one of your own delivery locations, or a counterparty location. You can also easily request a truck or rail quote from our logistics partners to change the delivery basis / location and update your pricing accordingly.