Chapter 1195: Chapter 204: Middleman
Germany has essentially developed a path dependency on East Africa. The emergence of East Africa allowed Germany to unexpectedly gain access to a vast market and raw material supply source since the 1880s, which was impossible in the past.
Although East Africa is not a German colony, its territorial and population advantages can bring greater economic benefits to Germany. After all, without East Africa, Germany could not compete with England and France. While Germany had several colonies in Africa, their actual returns were far less than the profits from direct trade with the vast nation of East Africa.
At that time, East Africa had a public ownership economy, so in its trade with Germany, it wasn’t purely driven by profit, but had to consider political, cultural, and geopolitical factors.
Coincidentally, Germany had already developed into a powerful industrial nation, while East Africa was just a nascent and backward agricultural country. Hence, in the early stages of trade between them, Germany held a superior position.
This advantage would gradually fade over time, especially now that East Africa has surpassed expectations in industrial development, reversing the trade dynamics between Germany and East Africa.
East African industrial goods can barely compete with Germany, and their agricultural products and mineral resources are indispensable to Germany. Moreover, with the onset of war, much of Germany’s civilian industry has come to a standstill, making it even harder to compete with East Africa.
One could say that without the war, if this trend continued, Germany would surely turn against East Africa, particularly since both nations have overlapping markets. For pre-war Germany, Central and Eastern Europe was one of its most important markets, just as it was for East Africa, which had long been East Africa’s largest overseas market, including Germany and Austria-Hungary.
Mombasa City.
As the most representative city in northern East Africa, Mombasa virtually monopolized most of the overseas trade in the northern part of East Africa.
Although East Africa has now acquired lands in Gabon and Cameroon, providing a maritime outlet on the West Coast for the north of East Africa,
its impact on present-day Mombasa City is minimal. On one hand, the vast tropical rainforests of Gabon are a natural geographic barrier, and as of now, the western section of the northern railway is still in the planning stages and has not commenced construction.
On the other hand, although Gabon lacks natural deep-water ports, its population and industrial base are still in the nascent stages, and its economy is even less developed than the hinterlands in northern East Africa, so Gabon currently poses no threat to Mombasa.
With the onset of war, Mombasa’s development has also accelerated, becoming a city capable of competing with Dar es Salaam City. Now the population of Mombasa has exceeded one million.
Unfortunately, there are too many "newcomer" cities in East Africa. Even traditional economic powerhouses like Dar es Salaam City and Mombasa City are facing immense pressure.
Hongmei Hotel.
As a high-end consumption venue in Mombasa City, it is also where many businessmen negotiate deals.
At this time, in a private room on the second floor of Hongmei Hotel, Italian businessman Teka was haggling with East African businessman Du Ping.
"Du Ping, the grain prices are too high this year. You need to lower them by another twenty Rhine Shields per ton. Otherwise, we might as well burn more coal and trade in Dar es Salaam City or Bela City. I suppose they’d be more willing to offer a reasonable price." Teka bluntly said to Du Ping, who was already a bit tipsy.
Although slightly drunk, Du Ping’s mind was still quite clear. He didn’t agree to Teka’s request directly but analyzed: "The grain prices are indeed higher than last year, but this is a reasonable market shift."
"Currently, the war in Europe shows no sign of ending and is instead expanding in scale, increasing the demand for grain. Your trading company can surely earn more from the price differentials. The current market environment is one of undersupply. Though I’m only a small trader without ambitions for huge profits, I can’t make too many concessions."
Teka feigned a complaint: "Du Ping, we’re old friends. You know, when you worked for the state enterprise in East Africa, I helped secure many deals. When you went solo a few years ago, I helped you a lot to get through the toughest times, so out of old friendship, you should lend a hand."
Indeed, the growth of Du Ping’s company was significantly related to the connections he’d accumulated while working for a state enterprise.
Teka was someone Du Ping met when the company sent him on a business trip to Italy, so they indeed had a longstanding relationship.
Of course, in Du Ping’s eyes, Teka’s account wasn’t entirely accurate. While Teka did contribute some efforts during his startup phase, their relationship was more of mutual benefit. After all, East African state enterprises lacked flexibility, while as a grassroots employee, Du Ping could obtain lower purchase prices in the Great Lakes Region through various means.
This was the foundation of Du Ping and Teka’s collaboration. Previously, the grain trade in East Africa was monopolized by the state, and businessmen like Du Ping emerged, quickly rising with the tide of East Africa’s new economic policy, forming today’s Du Ping Grain Trading Company.
So in the face of the "emotional card" from a "friend," Du Ping matter-of-factly said, "Teka, don’t say I’m not considering you. You can’t find a lower grain price anywhere else in all of Mombasa than with me. If I lower it by another twenty Rhine Shields, I’d be losing money."
"Of course, as a brother, I can bite the bullet and lower it by three Rhine Shields per ton. That’s my bottom line. If you can’t accept that price, then my hands are tied. After all, those working under me need to eat too, and the annual transportation cost from the Great Lakes Region to Mombasa isn’t cheap."
Although the outcome wasn’t ideal, Teka was quite satisfied. This was probably the largest concession Du Ping could make, and it was already well below the market price set by the Mombasa agricultural trade office.
Pouring another drink, he said to Teka, "Brother, I didn’t understand your difficulties before. Hearing you now, I’ve been petty. Rest assured, in the future, I’ll remember your support when there’s any benefit."
Du Ping smiled and said, "No problem, no problem. We’re brothers. No need to be so formal. As long as we continue our cooperation, the future holds great potential."
As a business partner, Du Ping valued Teka highly, primarily due to Du Ping’s latest assessment of the current trade conditions between East Africa and Europe.
In Du Ping’s view, the trade risk between East Africa and Europe, especially with the Allies, is significant, as the trade routes between East Africa and the Allies are controlled by England and France.
For example, Gibraltar, the Suez Canal, and even the Atlantic Ocean—if the Allies were driven to desperation, England and France were likely to increase efforts to hinder trade between East Africa and the Allies.
As an Italian, Teka’s advantage became apparent since Italy was currently a Neutral Country.
Italy wasn’t the great power it was in the past, lacking the same ambition as before, which kept it neutral to this day, hesitant to easily engage.
As Italy shares borders with France, Austria-Hungary, and Switzerland, it can remain neutral, doing business with both the Allies and the Allies’ opposition.
If the British went mad and completely blocked the Adriatic and the Black Sea, a portion of the trade between East Africa and Austria-Hungary would surely shift to Italy and other Neutral Countries.
Therefore, cultivating a relationship with Teka in advance could provide a fallback for his company. While calling it a fallback sounds a bit dire, it’s essentially just securing another channel.
As of now, Du Ping had made substantial profits amidst the European war, so retiring at this point wouldn’t be a loss for him. However, as a businessman, he naturally wanted to earn more.
Thus, the grain trade in Europe couldn’t be severed. Selling some to Teka at a lower price now might prove to be invaluable later.
Even if Italy joined the Allies, there was no need for concern since Italy itself is a decent consumer market and has consistently been a major buyer of East African grain. So in Du Ping’s eyes, Teka’s value has always been high.
Comments