Cooperative Grain Trade Opportunities in Eastern Europe

Opportunities for U.S. cooperatives to trade grains, oilseeds, and products with Czechoslovakia, the German Democratic Republic (G.DR), Hungary, and Poland are evaluated and marketing alternatives discussed. U.S. agricultural exports to these four countries totaled $497 million in 1982, representing 2.4 percent of total U.S. agricultural exports. Poland was the largest customer, followed by GDR, Czechoslovakia, and Hungary. Despite increased efforts toward self-sufficiency in grain and oilseed production, Eastern European countries are expected to remain substantial net importers in the 1980’s. Net imports of the four countries are projected to reach 6.3 million tons of feedgrains, 2.8 million tons of wheat, and 3.8 million tons of oilseed products in 1985. By 1990, net imports are projected to increase slightly to 6.4 million tons of oilseeds and products. Imports in these countries are arranged through Foreign Trade Organizations (FTO’s). Doing business with these state-owned monopolies requires special marketing skills and considerations. The FTO’s prefer to deal with suppliers that can provide desired commodities, quantities, qualities, and related services and can assure performance according to agreed terms. FTO’s tend to buy from the lowest bidder. Buyers preferred to deal with European-based sellers to facilitate communications and other relationships. To date, counter trade requests tied to grains and oilseeds imports are infrequent. Increasing hard currency balance of payments problems may increase the frequency of such requests. Credit terms are essential in making sales to some countries. Recent repayment difficulties, however, suggest caution in extending credit.