Part of the campaign on tariffs from the US over the past 18 months has been to help encourage trading partners to take more US produce. One of the deals which may concern wheat producers here is the Indonesian wheat deal.
Indonesia is a major importer of wheat which is used in both human and animal consumption. The United States Department of Agriculture (USDA) tell us that Indonesia imports 10.8mmt of wheat on average annually. In 2025/26 Indonesian wheat imports were estimated to have risen to 13.4mmt, before falling back to 12.5mmt in 2026-27 (figure 1). Indonesia produces no wheat but does harvest a 12-13mmt corn crop each year.
The US signed a deal with Indonesia to export 0.8mmt of wheat in 2025, which was to increase by 1mmt to close to 2mmt in 2026. In 2025 Indonesia ended up taking 1.09mmt of wheat from the US. For the five months from January to May the US had imported 0.2mmt of wheat, which is similar to how much was imported to that point in 2025. The US harvest started in June; we would expect to see wheat imports ramp up from there.
This is of interest Australia because Indonesia is a major market for our wheat. Figure 2 shows Indonesia has been a major market for Australian wheat, taking 18% of our exports in 2024-25 and 21% for 2025-26 to May.
Indonesia has been our largest market for wheat in 2025-26, with Philippines close behind. Increases in US wheat exports to Indonesia could displace Australian wheat, which could have some negative impact on our price relative to US prices.
For the coming harvest it’s unlikely there will be noticeable impacts on wheat prices. The crop is forecast to be smaller, and we can see in figure 2 that Australia has a wide range of markets to sell into. With ‘Other’ countries being a large chunk of exports, outside of the 13 largest markets, it tells us there is good competition for our wheat.
What does it mean?
Preferable treatment towards competitors in our export markets is never ideal, but we are yet to see any decrease in Indonesian demand for our wheat in 2026. There might be a little weaker demand from Indonesia come this harvest, but there is unlikely to be a noticeable impact on prices.
Key Points
- The US-Indonesian deal to trade more wheat raised some concerns.
- Indonesia is a major market for Australia but is a large importer overall.
- There has been little impact on Australian wheat exports to date.
Click on figure to expand
Click on figure to expand
Data sources: ABARES, USDA, Mecardo
