Products on Offer

Cranberry concentrate will be offered in two to three contract variations in each auction. The contract periods may vary from three, six or nine months. Ocean Spray is flexible in delivery options. Successful bidders can elect to take delivery of their product at any time during the contract period.

Through these back to back contract periods, Ocean Spray offers its customers full supply flexibility. Customers can secure supplies for a full year or on a short-term, spot basis.

Benefits to Participants

A level ‘playing field’ – all customers have equal opportunity to secure supply and all winning bidders pay the same base price for the same contract period.

Greater control over exposure to commodity price risk – customers choose their desired mix of contract periods and, as a result, control their own exposure to commodity price risk.

Greater control over securing supply – all bidders are able to secure concentrate subject only to credit constraints and their willingness to pay the auction clearing price

Greater transparency of price information – the timing of trading sessions and the starting prices will be published in advance.

A quick, low-cost sales process – avoids the need for lengthy price negotiations.

The Trading Process

CRA, as independent Trading Manager, conducts auctions over the Internet. The auctions are administered in an orderly manner and typically last less than a few hours. The contracts are available simultaneously and all bidders have equal opportunity to secure their volumes of interest by retaining their volume bids in the system until the trading process closes.

The trading process involves several key steps:

  1. The opening prices are set automatically at 85% of the preceding auction’s closing prices. Opening prices do not reflect Ocean Spray’s assessment of market pricing but are used simply as the starting point for bidding. After an auction closes, the opening prices for the next auction will be available on the CranberryAuction Information Website.
  2. On or before the day of trading, bidders re-confirm that they accept the terms and conditions of participation prior to entering the trading Website.
  3. At the start of trading, each bidder enters the volumes they wish to purchase at the announced starting prices. The Trading Manager closes the first bidding round after a pre-specified period of time.
  4. For each successive round, the Trading Manager raises prices and bidders enter new volumes and this continues round-by-round until the total bid volume falls to the level of volume available for purchase (i.e., the available volume is cleared). At no stage during the process do customers bid a price. Each customer stays in as long as they enter volume bids.
  5. Shortly after the close of trading, the Trading Manager confirms to Ocean Spray and privately to each bidder the volumes they have won and the corresponding EXW price in US dollars per US gallon.
  6. The customer is then contacted by their Ocean Spray Account Manager or by a distributer/agent to confirm final shipment details. Product is then shipped through Ocean Spray’s standard logistics process. Americas and Asia shipping point at Ocean Spray’s discretion. European shipments via Rotterdam (Kloosterboer warehouse).

About the Trading Manager

Read more about CRA’s world-renowned expertise and extensive experience in the design and implementation of auctions and other trading systems in a range of industries and countries – click here.

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