Indonesia increases US wheat purchases, intensifying competition for Australia

Indonesia, one of the world’s largest wheat importers, is set to significantly increase wheat purchases from the United States under a new trade agreement. The move is expected to intensify competition in the Asian wheat market and could reduce Australia’s share in one of its key export destinations.

According to the US Department of Agriculture (USDA), Indonesia imports an average of 10.8 mln tons of wheat annually. Wheat imports reached an estimated 13.4 mln tons in the 2025/26 season and are forecast to ease to 12.5 mln tons in 2026/27. The country produces virtually no wheat and relies entirely on imports to meet domestic demand.

Under the agreement with the United States, US wheat exports to Indonesia are expected to increase to nearly 2 mln tons in 2026. Indonesia imported 1.09 mln tons of US wheat in 2025, while imports during the first five months of 2026 remained broadly in line with the previous year. Shipments are expected to accelerate following the start of the new US harvest.

The development is particularly important for Australia, as Indonesia is its largest wheat export market. Indonesia accounted for 18% of Australia’s wheat exports in the 2024/25 season and 21% in the 2025/26 season through May. Higher US shipments could displace part of Australia’s exports and increase competition among major wheat suppliers.

Analysts do not expect a significant impact on global wheat prices in the near term. Australia’s wheat crop is forecast to be smaller this season, while the country has a diversified export portfolio that allows it to redirect shipments to other markets. Nevertheless, the US-Indonesia agreement highlights how trade policy is increasingly reshaping global grain trade flows and the competitive positions of leading exporters.

Tags: Australia, Indonesia, wheat, USA