FILE PHOTO: Chad Ward harvests winter wheat in a John Deere combine near Skedee, Oklahoma, US June 13, 2024. Indonesia may buy at least 800,000 tonnes of wheat from the US this year, up from 740,000 tonnes in 2024, and a minimum of one million tones annually from 2026. - Reuters
JAKARTA: Indonesia, the world’s second-biggest wheat buyer, plans to purchase more wheat from the US as it seeks to secure a trade deal ahead of the looming tariff deadline.
The South-East Asian nation signed a memorandum of understanding for US wheat purchases that spans this year through 2030, Franciscus Welirang, the chairman of the Indonesian Flour Mills Association - known as Aptindo - said at a ceremony Monday (July 7) in Jakarta. The deal is valued at about US$1.25 billion, he said.
As part of the MOU, Indonesia may buy at least 800,000 tonnes of wheat from the US this year, up from 740,000 tonnes in 2024, and a minimum of one million tones annually from 2026, he said. The US last sold more than one million tonnes of wheat to Indonesia in 2020, when it shipped about 1.2 million tonnes, US Department of Agriculture figures show.
While the new pledge marks an increase, it still represents a fraction of Indonesia’s total wheat purchases. The USDA forecasts the country’s imports at 12 million tonnes in the 2025-26 season.
The agreement will increase access for US wheat in Indonesia and help ensure a stable and steady market, Joe Sowers, regional vice president for South and South-East Asia for industry group US Wheat Associates, said after the signing in Jakarta. Seven major wheat suppliers, including Cargill Inc. and Bunge Global SA, will participate in the market based on their price competitiveness, he said.
The nation mainly buys wheat from Australia, Canada and the US, Welirang said, adding that the country may import about 9.5 million tonnes for the flour industry this year and the rest for feed.
Indonesia also plans to sign similar pledges to boost purchases of other commodities, including corn and soybeans, at an event Monday afternoon in Washington, according to Pujo Setio, an official from the nation’s Coordinating Ministry for Economic Affairs. - Bloomberg
