A new trade framework between the U.S. and Indonesia, paired with a major industry deal, could see U.S. wheat exports to Southeast Asia’s second-largest market double — tapping into Indonesia’s surging demand for flour-based foods and growing share of global imports.

U.S. Wheat Associates (USW) has welcomed the announcement of a new framework agreed upon by the U.S. government and the Republic of Indonesia to negotiate an Agreement on Reciprocal Trade (ART), a move expected to open significant opportunities for American wheat in one of the world’s fastest-growing markets.

According to the announcement, the proposed trade pact would remove Indonesian tariffs on 99% of U.S. products, cut non-tariff barriers, and include purchase commitments for a range of U.S. agricultural goods, notably wheat.

This development builds on a major milestone reached earlier in July when USW and APTINDO — Indonesia’s flour milling association — signed a Memorandum of Understanding (MOU). Under the agreement, APTINDO pledged to double its annual U.S. wheat purchases to 1 million metric tons for each of the next five years. The commitment reflects Indonesia’s rapidly growing demand for wheat-based foods.

“We are excited and grateful to track this wide-reaching government commitment that includes the agreement signed between Indonesian flour millers and the U.S. wheat industry,” said Mike Spier, USW President and CEO. 

USW expressed optimism that successful ART negotiations will further deepen U.S.–Indonesia economic ties, providing sustained market access for high-quality U.S. wheat and supporting Indonesia’s expanding milling sector.

INDONESIA’S GROWING APPETITE FOR WHEAT

Indonesia is one of the most important wheat markets in the world, ranking as the second-largest wheat importer globally after Egypt and holding immense growth potential. The country produces no wheat domestically, relying entirely on imports to meet demand.

Annual wheat consumption averages 10–11 million tonnes, but in recent years, rising demand for flour-based foods such as noodles, bread, and other bakery products — coupled with rapid urbanization and changing dietary habits — has driven consumption steadily upward. Wheat is also used as a substitute for corn in animal feed, adding further momentum to demand growth.

In the 2023/24 season, Indonesia imported around 10.5 million tonnes of wheat. For the 2024/25 season, imports are forecast to climb to 12 million tonnes. Australia remains Indonesia’s dominant wheat supplier with roughly 30% market share, followed by Canada. In recent years, Russia and Ukraine have also increased their presence, capitalizing on competitive pricing and expanding trade links.