Indonesia may struggle to deliver on new US farm import promises, traders say
Indonesia may struggle to deliver on new US farm import promises, traders say
By Bernadette Christina, Dewi Kurniawati and Naveen ThukralWed, February 25, 2026 at 9:12 AM UTC
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FILE PHOTO: Workers cook soybean at a tofu factory, following the coronavirus disease (COVID-19) outbreak, in Jakarta, Indonesia, February 5, 2021. REUTERS/Ajeng Dinar Ulfiana/File Photo
By Bernadette Christina, Dewi Kurniawati and Naveen Thukral
JAKARTA/SINGAPORE, Feb 25 (Reuters) - Indonesia could struggle to meet its pledge for a significant ramp-up of U.S. agricultural imports under its new trade deal, traders said, with the burden of vastly increasing U.S. soymeal purchases falling on a state agency newly tasked to buy animal feed.
Indonesia last week finalised a deal that lowers U.S. tariffs on its goods to 19% from 32%, with key commodities including palm oil, cocoa and rubber exempted from import duties.
In return, Indonesia pledged to raise annual U.S. wheat imports to 2 million metric tons from 1.1 million tons last year, boost soybean purchases to 3.5 million tons from 2.2 million tons, and increase soymeal imports to 3.8 million tons from 216,257 tons, among other commitments.
"Indonesian millers are already buying more U.S. wheat," said a trader at an international trading company which supplies wheat and feed grains to Indonesia, noting the country's buying of U.S. wheat increased to 1.1 million tons in 2025, up from 750,000 tons a year earlier.
"At best, they can buy 1.25 or 1.3 million tons in 2026."
The U.S., a major supplier of agricultural goods, is seeking to diversify farm exports to markets beyond top buyer China, which is curbing purchases amid trade tensions with Washington.
For soybeans, Indonesia already buys most of its cargoes from the U.S. to meet rising demand for tofu and tempeh, a traditional cake-like fermented bean product, and its new commitment to Washington exceeds its overall annual imports.
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Indonesia consumes 2.7 million to 2.9 million tons of soybeans per year, according Akindo, the country's soybean importers association, nearly all of it imported.
"The commitment to purchase 3.5 million tons per year needs to be assessed realistically so that it will not exceed domestic demand, disrupt supply balance," Akindo Chairman Hidayatullah Suralaga said on Tuesday.
Indonesia bought 216,257 tons of U.S. soymeal in 2025, up around 50% from a year earlier but far short of the 3.8 million tons of the animal feed ingredient it has committed to buy.
Because the purchase commitment is so high, Indonesia could direct Berdikari, the country's state-owned animal feed importer, to buy larger volumes to please the U.S., even if prices are higher than those offered by competing suppliers, said a Singapore-based grain trader.
Late last year, Jakarta tasked Berdikari with making all feed-grain purchases from 2026, shifting the role from private importers.
Berdikari has been assigned to import around 5 million tons of soybean meal in 2026 to supply feed mills and smallholder chicken farmers, Agung Suganda, director general of livestock and animal health at the Agriculture Ministry, said in a statement on December 30.
Berdikari's preparations to import soybean meal are underway and it is awaiting government regulations for the imports, which it expects will be issued in March, Corporate Secretary Hasbi Al-Islahi said on Tuesday.
Indonesia imported 5.96 million tons of soymeal in 2025.
Under its deal with Washington, Indonesia also agreed to purchase 100,000 tons of U.S. corn and 163,000 tons of cotton, in addition to beef and fruit.
(Reporting by Bernadette Christina, Dewi Kurniwati and Naveen Thukral; Editing by Christian Schmollinger)
Source: “AOL Breaking”
