Russia’s rising trade via the Black Sea had made this country the world’s largest grain exporter in the mid-nineteenth century. However, this trade faced challenges after the 1870s. First, Greek and British merchants were dominant in navigation tasks in the Black Sea and, as a result, dictated transportation costs of Russian grain. Secondly, in the British market Russian wheat met serious competition with not only American, but also Danubian grain. Thirdly, in order to reach European markets via the Mediterranean Sea, Russian vessels had to pass through the Bosphorus and Dardanelles Straits, which the Ottoman Empire controlled and often closed in times of war, especially with Russia.
To solve these problems, the Ministry of Finance improved the transportation systems by financing railway companies and merchant fleets and, in 1894, concluded a commercial treaty with Germany, a new customer of Russian grain. Yet the growing grain export to Germany imposed heavy burdens on Russian peasants, who in turn caused serious social conflicts. Meanwhile, Russia’s Foreign Ministry tried to control the Balkan states, especially the Danubian Principalities, to protect Russia’s Black Sea navigation. Yet the growth of Danubian agriculture under Russian control also stimulated grain exports through the Danube River, which intensified competition with Russian trade.