Southeast Asia Reshapes the Global Agricultural Trade Map
Southeast Asian countries are set to shift the balance of global agricultural trade by intensifying agreements to increase their imports of American wheat, corn, and soybeans. Nations like Indonesia, Bangladesh, and Vietnam have begun to bolster their purchases from the United States, threatening the traditional market shares of historical exporters like Australia, Canada, Argentina, and Russia.
Over the past decade, farmers from the Black Sea region (Russia and Ukraine) and South America have managed to carve out a portion of the Asian market at the expense of the United States. Indonesia, the world’s largest wheat importer, had relied heavily on Ukraine, Russia, and Argentina. However, this trend is beginning to reverse. Thanks to trade agreements and competitive pricing, the United States has regained its position. Since July, Indonesian mills have purchased 250,000 tons of American wheat, with a commitment to import up to one million tons annually.
Bangladesh is following a similar path. In July, Dhaka approved the import of 220,000 tons of American wheat, with an annual agreement set to reach 700,000 tons in the future, after importing almost nothing from the United States in 2024.
Price Battle
Washington’s primary weapon today is price. American soft red wheat is being offered at around $280 per ton, matching Black Sea prices. Additionally, American corn is $10 to $15 cheaper than its South American counterpart, while U.S. soybean meal is selling for five dollars less than its competitors.
Although these price differences may seem minor, they are crucial in countries striving to secure large quantities of food at lower costs to feed their growing populations. Asia, as a net food importer, accounts for about 30% of global purchases of wheat, corn, and soybean meal.
Consecutive Agreements
Following Indonesia and Bangladesh, Vietnam is moving along the same lines, announcing in June its intention to sign contracts worth two billion dollars with the United States, including $800 million with Iowa alone to import corn, wheat, and other derivatives. Its purchases of American corn during the 2024/2025 season are expected to rise to 1.1 million tons, compared to just 2,000 tons during the same period last year.
The Philippines and Thailand are also preparing to enhance their imports of American corn. Bangkok has indicated plans to import two million tons of soybeans as part of a new agreement, while Manila is discussing reducing tariffs on corn to diversify its sources.
Australia and the Black Sea Under Pressure
This shift poses a direct threat to traditional exporters. Australia, which supplied Indonesia with 3 million tons of wheat in 2024 (a quarter of its needs), risks losing hundreds of thousands of tons from its market share. Meanwhile, Black Sea farmers, who already face high transportation costs due to distance, may be further impacted by American competition.
Reshaping Global Flows
This transition reflects a stable trend: amid geopolitical tensions and countries’ needs to secure their supplies, the United States is employing both price and trade diplomacy. If Asian countries commit to these agreements, the global grain trade map could be redrawn: more American grains flowing to Asia, while Australia, Argentina, Russia, and Canada may be forced to reposition themselves.
Timothy Lu, the regional director of the U.S. Soybean Export Council for Southeast Asia and Oceania, believes these agreements provide Washington with an opportunity to solidify its presence in Asian markets in the long term.
While recent years have seen a decline in the United States’ position against competitors from the Southern Hemisphere and the Black Sea, Asia now offers an unexpected chance for recovery. The competition over wheat, corn, and soybeans will not only be resolved by quantity but also by the ability to forge strategic partnerships that secure a stable position in the global food supply chain.
