US and Indonesia open tariff-free channel for grains

The United States and Indonesia have finalized a new Reciprocal Trade Agreement, granting tariff-free access for US corn, sorghum, barley, co-products, and ethanol to the Indonesian market. The US Grains & BioProducts Council (USGBC) called the deal a strategic breakthrough for American feed grain and co-product exporters.

Under the agreement, US tariffs on Indonesian goods are reduced from 32% to 19%, while most US products entering Indonesia will face no tariffs. For the US grain sector, this improves price competitiveness in one of Southeast Asia’s largest feed and fuel markets.

Indonesia, with a population exceeding 275 million, is one of the region’s fastest-growing consumers of animal protein and transportation fuels. According to the USDA, the country imports substantial volumes of feed grains each year to support its expanding poultry and aquaculture sectors, and corn demand has steadily risen due to livestock modernization efforts.

A key component of the deal is Indonesia’s commitment to biofuel blending. By 2028, transportation fuels will include E5, increasing to E10 by 2030, with longer-term plans for E20. This aligns with global decarbonization efforts and is expected to generate sustained demand for US ethanol. Previously, Indonesia implemented palm-based B30 biodiesel mandates, and the new ethanol commitments signal diversification in its renewable fuel strategy.

Beyond tariffs, Indonesia will also remove unjustified sanitary and phytosanitary barriers that have historically limited US grain access. The absence of quantitative restrictions could allow corn purchases to exceed current commitment volumes, providing additional opportunities for US exporters.

USGBC Chairman Mark Wilson praised the agreement as a win-win for both American producers and Indonesian consumers. He noted that expanded access to Indonesia helps diversify export markets beyond traditional buyers such as Mexico, Japan, and South Korea.

Tags: corn, barley, Indonesia, USA, sorghum