Russian Railways and the Seaborne Grain Export Trade: 1883-1911

Grain Market Integration in the Baltic Sea Region in the Nineteenth Century

“…Secondly, it also reflected a fall in transports costs so that cheaper grains could carry their freight costs. The decline in freight costs, for example, allowed for an immense growth, from mid-century, in Russian exports of oats from ports on the Baltic, as well as barley from ports on the Black Sea (Gulley 1987).…”

“…Russian and Ukrainian wheat was shipped from Odessa and other ports on the Black Sea, and American wheat over the Atlantic (Fairlie 1965; Falkus 1966; Harley 1980; Goodwin and Grennes 1998). However, the export of wheat from St. Petersburg and other Baltic ports of Tsarist Russia continued to grow and reached its highest volume in the early 1880s (Gulley 1987, pp. 325 ff).…”

“…Besides wheat from St. Petersburg, increasing quantities of rye and oats were also exported from these ports. While wheat and oats were largely destined for Britain, rye, in particular, was shipped to German ports and this entailed a growth of the grain trade within the Baltic Sea (Gulley 1987; Hailer 1902). A larger diversity of the qualities of supply is arguably an explanation of an increased price spread.…”

“…The different patterns of integration for St. Petersburg and Riga reflect developments of their wheat exports. While shipments of wheat from St. Petersburg rose from about 45,000 tons in the first one-half of the 1860s to more than 300,000 tons in 1881–1885, wheat shipments from Riga remained at 10,000 over five year periods (Gulley 1987). For London, the relative importance of Baltic wheat may have diminished, although the volumes remained high enough to benefit from the generally increasing market efficiency.…”

“…To these factors can be added traded volumes which interacted both with institutions and the scale effects of transport technology. To the latter belongs, indeed, the impact of railways with the enlargement of the areas of supply that pressed down the prices of wheat and increased volumes (Harley 1980; Gulley 1987; O'Rourke and Williamson 1999). 2 Although a comprehensive account of the effect of traded volumes on market integration is still lacking, our evidence suggests that volume plays a crucial factor in explaining market integration particularly in the early stages of market integration.…”