MOSCOW, RUSSIA — Exportkhleb, Russia’s grain agency celebrates its 80th anniversary this year and looks back on a colorful past.
Founded in 1923 as the state agency primarily responsible for grain exports, until 1951 it also exported and imported other commodities.
With port terminal and storage facilities in Novorossijsk, Nikolaev, Odessa, Leningrad and Feodosia, it exported 9.8 million tonnes of grain from the Soviet Union during its first five years. Exports steadily increased from the mid-1960s, reaching 8.6 million tonnes by 1971, mainly from newly reclaimed virgin lands in Kazakhstan and Siberia. SKS-14 (Soviet Kazakhstan Spring Wheat) and SKS-16, with 14% and 16% proteins respectively, competed favorably with Canadian and U.S. wheat.
Exportkhleb acquired joint-stock status in 1991. Amongst its shareholders are nearly all ministries of procurement of FSU republics, chartering, insurance companies, banks, silos and agricultural enterprises from Rostov, Krasnodar, Stavropol and Orenburg regions.
As a joint-stock company VAO Exportkhleb remained a State Agent and continued to carry out purchases of grain and grain products under all state credits granted to the Russian Federation in 1991 through 1995, including the Export Credit Guarantee Program (GSM-102), the Agricultural Trade Development and Assistance Act of 1954 (known as Public Law-480), Food for Progress and additional credits from the European Economic Community (EEC). Since 1991 about 56 million tonnes of grain and feedstuffs valued at U.S.$8 billion has been delivered by Exportkhleb to Russia, transshipped in the ports and dispatched to consignees against credits.
Starting in 1993 Exportkhleb expanded its activities to include the free market, and since 1995 Exportkhleb has invested in the production and processing of grains and oilseeds in Samara, Rostov, Voronezh, Kostroma regions and in the Stavropol territory.
MAKING ITS MARK AS AN IMPORTER
Grain imports into the USSR exceeded exports for the first time in 1963, at 3 million tonnes, when a one-off, one million tonne deal was struck with Continental Grain Company, New York, U.S. Imports of various grains exceeded exports occasionally in 1964 to 1966, but it wasn’t until 1972 that continuous purchases of grains at more than 15 million tonnes started, extending through 1993.
The Soviet Union considered the U.S. market as the main source of grain supply. The U.S share of Soviet imports exceeded 75% in the case of corn and 90% of soymeal and beans in several years. World grain prices to a large extent depended on the volume and timing of the Soviet purchases, which constituted 17% of the overall world trade in feed grains, wheat and soybeans.
In 1980, the U.S. government, led by President Jimmy Carter, embargoed trade with the Soviet Union, forcing it to open new grain markets in Argentina, Canada, Australia and the EEC. Consequently the U.S. share decreased during the years of Russia’s maximum imports; in 1984 and ’85, U.S. share reached only 33% to 38%. Subsequently a trade agreement was signed with the U.S., at first for 4 to 6 million tonnes a year, which was negotiated up to 6 to 8, then 12 to 14 million tonnes. All purchases were carried out from Moscow by phone and telex, with millions of tonnes contracted in just one day.
Record imports of grains reached about 46 million tonnes in 1984 and 1985, equal to 24% to 26% of the local grain crop. A record of 2 million tonnes of soybean imports was reached in 1986, and in 1989 record soybean imports totaled 3.9 million tonnes.
Today Exportkhleb’s activities are centered on exports of a variety of grains and sunflower seeds to different parts of the world. It is one of the leading exporters of these commodities from Russia, with plans to construct its own terminal for loading export grain in the Black sea area.
It is one of founders of the Russian Grain Union, Russia Commodity Exchange, Moscow Grain Exchange, Moscow Chamber of Commerce, as well as a member of GAFTA, The Federation of Oils, Seeds and Fats Associations (FOSFA) and the International Association for Cereal Science and Technology (ICC).
During its 80 years of existence a turnover of one billion tonnes has been reached — a quarter in export operations. Expressed in hopper cars, Exportkhleb said, it would circle the globe more than five times.