Southeast Asian nations will reshape the global grain and oilseed trade flow through U.S. deals, which include increasing agriculture purchases. Increased American shipments are expected to displace Australian, Canadian, and Russian supply.

As part of the agreements that lower tariffs for their exports to America, Indonesia and Bangladesh already agreed to increase their buying. However, grain traders in the region say Vietnam, Philippines, and Thailand could also boost their purchases.

Ole Houe is the director of advisory services for IKON Commodities, a Sydney-based commodity trading company. He said that U.S. agricultural exports will gain in Asia. Trade deals create pressure but the cheaper prices of U.S. corn, wheat and soymeal are just as important.

Asia is a major market for food suppliers worldwide, since the region is a net importer of food. This is due to its growing population and rising incomes. According to U.S. Department of Agriculture statistics, Asia imports about 30% of the world's wheat, corn, and soymeal.

Analysts and traders said that an influx of U.S. crop exports could drive down the prices of rivals' crops and increase their costs to transport grains over longer distances.

In the last decade, the U.S. market has been eroded by suppliers from South America and the Black Sea.

According to the Indonesian Wheat Flour Producers Association, the U.S. share in Indonesian wheat exports has dropped by nearly 50% over the last five years. It is now dominated by imports from Ukraine and Russia, as well as Argentina.

According to two grain traders in Singapore, Indonesian flour millers bought around 250,000 metric tonnes of U.S. Wheat since July. As part of the trade negotiations, the association agreed to purchase 1 million tons annually of U.S. Wheat. The U.S. will sell 693,000 tonnes of wheat to Indonesia in 2024.

Prices are important as these private deals will be made by millers, but getting one hundred thousand tons of U.S. Wheat will not be an issue for us," said a representative from the association who declined to be identified as they weren't authorised to talk to media.

Three Australian grains traders said that Australia provides about a quarter (25%) of Indonesia's total wheat. They could lose hundreds of thousands tons in sales. However, exporters farther away might be more affected. The country's statistics bureau said that it exported 3 million tonnes to Indonesia in 2024.

Tobin Gorey of Cornucopia, an Australian commodities consultancy, said that if there were fewer sales to Indonesia and Bangladesh of Australian wheat then the wheat would probably end up somewhere else.

VIETNAM DEALS

A Dhaka official from the food ministry confirmed on July 30 that Bangladesh had approved imports of approximately 220,000 tons U.S. Wheat. Bangladesh committed to import 700,000.00 tons of American Wheat annually on July 20, to strengthen trade relations.

The Singapore-based traders stated that Vietnam, as one of the fastest growing animal feed markets in the world, will likely import U.S. corn, wheat and soymeal.

Vietnam's Agriculture Ministry announced that in June, firms would sign memorandums to understand to purchase $2 billion worth of U.S. agricultural products, including five agreements for $800 millions of products from Iowa. These include corn, wheat and dried distillers grain.

The agreements have not been signed in a formal manner.

Argentina is the leading grain supplier to Vietnam, accounting for over 50% of its corn imports and 65% of soymeal in the last five years.

USDA data shows that Vietnam increased its corn purchases from the United States for the 2024/25 Marketing Year, which ends on August 31. It has taken 1.1 million tonnes, and another 19,051 are due to be delivered by the end the month.

Vietnamese importers booked 134,000 tonnes for the 2025/26 year of marketing, compared to only 2,000 at the same time last year.

CORN FEED

The two Singapore-based traders also said that Thailand and the Philippines may become major importers of U.S. Corn.

One trader said that purchases linked to trade agreements could lead Thailand to buy more than one million tons of U.S. corn to replace its current purchases of feed wheat and corn from Asia.

The trader stated that the Philippine corn purchase could increase as it needs to replace feed wheat of 3.3 million tonnes. However, its purchasing will depend on its corn tariffs.

A senior adviser on economics and trade to Philippine President Ferdinand Marcos Jr. stated that tariffs were still in place for corn, rice and sugar imports, as well as fish, chicken, pork and other meats.

The Thai Finance Minister announced on August 1 that the country would import up to two million tons of U.S. soya beans. The Thai soybean purchases have not been further detailed.

Timothy Loh, U.S. Trade Representative for Southeast Asia and Oceania, said: "There were productive trade discussions that present an opportunity to the U.S. Regional director of the Soybean Export Council for Southeast Asia & Oceania.

We anticipate a higher demand for U.S. exports such as soybean meal and other U.S. agricultural products in Southeast Asia.

Some U.S. agricultural products are priced competitively with those from other regions. U.S. soft-white wheat was priced at $280 per ton, based on cost and freight. This is the same price as Black Sea wheat of similar quality.

According to a grain trader in Singapore, U.S. soybean meal is $5 cheaper than rival products from South America.

(source: Reuters)