Asia’s pledge to boost US farm imports could reorient trade flows

Southeast Asian countries are set to reshape global grain and oilseed trade flows through trade deals with the United States that include increased purchases of agricultural products, with increased American shipments crowding out shipments from Australia, Canada and Russia.

While Indonesia and Bangladesh have already agreed to increase purchases under deals that impose reduced duties on their exports to the United States, regional grain traders say Vietnam, the Philippines and Thailand could increase purchases of feed grains under their deals.

“US agricultural exports will certainly gain ground in Asia,” said Ole Hau, director of advisory services at IKON Commodities in Sydney. “On the one hand, trade deals create pressure, but equally important are lower prices for US wheat, corn and soybean meal, which are cheaper than competing exporters.”

Asia, a net food importer, is a key market for global suppliers as consumption in the region grows along with rising populations and incomes. Asia accounts for about 30% of global wheat, corn and soybean meal imports, according to the U.S. Department of Agriculture.

The influx of U.S. crops could drive down prices for competitors and raise the cost of transporting the grain over long distances, traders and analysts say.

Black Sea and South American suppliers have gained ground in Asia over the past decade, taking market share from the U.S.

The share of U.S. wheat supplies has fallen by nearly 50% in the past five years, replaced by imports from Ukraine, Russia and Argentina, according to the Indonesian Wheat Flour Association.

However, Indonesian millers have bought about 250,000 tonnes of U.S. wheat since July, according to two Singaporean grain traders. The association has signed a memorandum of understanding to buy 1 million tonnes of US wheat annually as part of trade talks to reduce tariffs. The US sold 693,000 tonnes to Indonesia in 2024.

“Prices are critical because these will be private deals between millers, but getting a million tonnes of US wheat is not going to be an issue for us,” said an association spokesman, who declined to be named because he was not authorised to speak to the media.

Australia supplies about a quarter of Indonesia’s wheat and could lose several hundred thousand tonnes in sales, three Australian grain traders said, although exporters further afield could be hit harder. Australia exported 3 million tonnes there in 2024, according to the country’s statistics office.

“If Australian wheat sales to Indonesia or Bangladesh decline, that wheat is likely to end up in places further afield,” said Tobin Gorey, founder of Australian commodity consultancy Cornucopia.

VIETNAMESE OFFERS

Bangladesh has approved imports of about 220,000 tonnes of U.S. wheat, a food ministry official said in Dhaka on July 30. On July 20, Bangladesh committed to importing 700,000 tonnes of U.S. wheat annually to strengthen trade ties, up from virtually no purchases in 2024.

Vietnam, one of the world’s fastest-growing animal feed markets, is likely to import U.S. wheat, corn and soybean meal, according to Singapore traders.

In June, Vietnam’s agriculture ministry said the companies would sign memorandums of understanding to buy $2 billion worth of U.S. farm products, including five deals to buy $800 million worth of Iowa products, including corn, wheat, distillers dry grains and soybean meal.

It was unclear whether the deals had been formally signed.

Argentina is currently Vietnam’s leading grain supplier, accounting for more than 50% of corn imports and 65% of soybean meal imports over the past five years.

Vietnam has increased its corn purchases from the United States for the 2024/25 marketing year that ends Aug. 31, buying 1.1 million tonnes, with another 19,051 tonnes scheduled to be delivered by the end of the month, according to the U.S. Department of Agriculture.

For the MY 2025/26, Vietnamese importers have secured 134,000 tonnes, up from just 2,000 tonnes secured at this time last year for 2024/25.

FEED CORN

Thailand and the Philippines could also become key importers of U.S. corn, according to two Singapore-based traders.

One trader said the trade-related purchases could see Thailand buy more than 1 million tonnes of US feed corn, based on what it would need to replace its current purchases of Black Sea feed wheat and Asian feed corn.

The trader said the Philippines’ corn purchases could increase as the country needs to replace 3.3 million tonnes of feed wheat, although the amount would depend on the reduction in tariffs on corn.

In July, after the two sides announced the trade deal, a senior economic and trade adviser to Philippine President Ferdinand Marcos Jr. said tariffs on US imports of corn, rice, sugar, fish, pork and chicken had not been lifted.

After the trade deal with the US was announced on August 1, Thailand’s finance minister said the country would import up to 2 million tonnes of US soybeans. However, no further details on Thailand’s soybean purchases were immediately available.

“Productive trade negotiations have taken place, which presents an opportunity for the United States to strengthen its access to markets in our region,” said Timothy Lo, regional director for Southeast Asia and Oceania for the U.S. Soybean Export Council.

“We expect to see increased demand for U.S. products such as soybean meal and other U.S. agricultural exports to Southeast Asia.”

Some U.S. agricultural products are price-competitive with other regions. This week, U.S. soft white wheat was offered at about $280 a tonne cost and freight (C&F), the same as similar Black Sea wheat.

A Singapore grain trader said U.S. corn is about $10 to $15 a tonne cheaper than the South American product, and U.S. soybean meal is selling at a $5 discount to rival suppliers.

Tags: Thailand, USA, Bangladesh, corn, Philippines, Indonesia, Vietnam, soybean