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 (MOU) for US wheat purchases that spans this year through 2030, Mr Franciscus Welirang, the chairman of the Indonesian Flour Mills Association – known as Aptindo – said at a ceremony on July 7 in Jakarta.
The deal is valued at about US$1.25 billion (S$1.6 billion), he said.
As part of the MOU, Indonesia may buy at least 800,000 tons of wheat from the US this year, up from 740,000 tons in 2024, and a minimum of 1 million tons annually from 2026, he said.
The US last sold more than 1 million tons of wheat to Indonesia in 2020, when it shipped about 1.2 million tons, US Department of Agriculture (USDA) 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 tons in the 2025 to 2026 season.
The agreement will increase access for US wheat in Indonesia and help ensure a stable and steady market, Mr 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 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, Mr Welirang said, adding that the country may import about 9.5 million tons 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 on July 7 in Washington, according to Mr Pujo Setio, an official from the nation’s Coordinating Ministry for Economic Affairs. BLOOMBERG
