Indonesia to increase wheat imports from the United States after agreement
Indonesia plans to boost wheat and soybean imports from the US under a \$4.5 billion trade deal, easing tariffs and non-tariff barriers. While aiming to stabilise food prices, the move also seeks to appease Washington. The agreement may reshape Indonesia’s import patterns, previously dominated by Australia and Canada.
The Indonesian government last week revealed plans to prioritise wheat and soybean imports from the US as part of a comprehensive trade agreement, primarily to appease Donald Trump, but it is also reported to have established important new agricultural trade channels between the two nations.
According to Indonesia’s Agriculture Minister Andi Amran Sulaiman, the initiative is part of a $US4.5 billion agricultural import commitment that reduces tariffs and is tied to a broader reciprocal deal encompassing energy purchases and aircraft acquisitions. The minister cited domestic supply gaps and the need to stabilise food prices as primary motivations, largely ignoring the bullying tactics adopted by the US administration.
Sulaiman said there was a possibility of importing other commodities such as milk and beef from the US, but said final decisions will depend on an evaluation of national demand and domestic supply. While expressing openness to international trade cooperation, the minister stressed that imports will only proceed if domestic production is unable to meet national needs and the negotiated price is in line with international values.
He reiterated the government’s commitment to maintaining a balance between opening the market and safeguarding local producers, amid the evolving dynamics of global agricultural trade.
Under the deal, Indonesia will eliminate a number of non-tariff barriers and recognise US Food and Drug Administration certifications for certain goods. At the same time, the US will reduce tariffs on Indonesian exports to the US from the previously advised 32 per cent to 19pc.
According to Indonesian trade data, soybean imports reached 2.68 million tonne in 2024, almost 18pc higher than the previous year, with the majority sourced from the US. The most widely consumed soybean food products in Indonesia are tempeh and tofu, while soybean meal is a crucial component in stockfeed rations, particularly for the poultry sector.
Wheat imports from July 2024 to May 2025 totalled 9.4 million tonne, a decrease of 21.5pc compared to the previous corresponding period.
Australian exporters enjoy a geographical advantage when trading with Indonesia, as well as a customer preference for yellowish noodles produced from Australian wheat.
Australia captured a market share of 31.1pc, followed by Canada and Ukraine with 22.3pc and 17.9pc, respectively. The US market share was only 6.9pc, with a value of just $US195 million.
The latest announcement comes hot on the heels of a commitment by the Indonesian Flour Mills Association to double its annual purchases of US wheat to one million tonne each year for the next five calendar years.
Purchases in 2025 will be prorated with a minimum of 800,000 tonne agreed. While cautious, analysts suggest this could reshape Indonesia’s grain sourcing landscape, which has traditionally leaned on Australia and Canada.
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Source : The Land
