Australia’s Grain Producers Australia (GPA) has warned that a new trade arrangement between Indonesia and the United States could signal increasing politicization of global grain trade and potentially squeeze Australian wheat out of key export markets. Industry representatives say such agreements could reshape global trade rules, where decisions are influenced not only by price and quality but also by political considerations.
GPA chair and Western Australian grower Barry Large said the main concern for producers is not the volume of wheat involved but the precedent the deal could set. According to him, Australian grain producers compete very effectively in global markets when trade is open and decisions are driven by price, quality, and reliability rather than political agreements between governments.
On February 20, the United States and Indonesia announced the signing of a reciprocal trade agreement. Under the deal, Indonesia committed to introducing zero tariffs on several key US products, including agricultural commodities such as wheat and soybeans. Indonesian officials said the move aims to ensure that food products made from these raw materials do not become more expensive for consumers.
Indonesia is one of the world’s largest wheat importers and has long been the biggest export destination for Australian wheat. The country imports around 10–11 million tonnes of wheat annually, with Australia supplying about 4–5 million tonnes in strong production years. However, recent reports suggest Indonesia may increase preferential purchases of US wheat to around 2 million tonnes per year, effectively reserving a portion of the market outside normal commercial competition.
GPA noted that such arrangements could reflect a broader trend in which agricultural purchases are used as tools in geopolitical negotiations. For Australia, which exports around 70 percent of its wheat production, reliable access to open and competitive global markets remains critical, prompting producers to call for transparent trade rules and fair competition.
