By Naveen Thukral
SINGAPORE (Reuters) -Southeast Asian nations are set to reshape international grains and oilseed commerce flows by way of U.S. commerce offers that embody elevating agriculture purchases, with elevated American shipments displacing Australian, Canadian and Russian provide.
Whereas Indonesia and Bangladesh have already agreed to elevated shopping for as a part of agreements that set lowered tariffs on their exports to the U.S., regional grains merchants say Vietnam, the Philippines and Thailand could increase feed grain purchases below their offers.
“U.S. farm exports are clearly set to realize floor in Asia,” mentioned Ole Houe, director of advisory providers at IKON Commodities in Sydney. “On one hand, commerce offers are creating stress, however simply as essential are the decrease costs of U.S. wheat, corn and soymeal, that are cheaper than provides from rival exporters.”
Asia, a web meals importer, is a crucial marketplace for international suppliers, because the area’s consumption is rising with rising inhabitants and incomes. Asia accounts for about 30% of world wheat, corn and soymeal imports, in line with U.S. Division of Agriculture knowledge.
An inflow of U.S. crops might push down costs for rivals and drive up prices for them to ship grains at larger distances, merchants and analysts mentioned.
Over the previous decade, suppliers from the Black Sea and South America have gained floor in Asia, consuming into U.S. market share.
The U.S. share of Indonesian wheat shipments has fallen by nearly 50% up to now 5 years, changed by imports from Ukraine, Russia and Argentina, in line with knowledge from the Indonesian Wheat Flour Producers Affiliation.
However Indonesian flour millers have purchased about 250,000 metric tons of U.S. wheat since July, in line with two Singapore-based grain merchants. The affiliation signed a memorandum of understanding then to purchase 1 million tons of U.S. wheat yearly as a part of commerce negotiations to realize decrease tariffs. In 2024, the U.S. offered 693,000 tons to Indonesia.
“Costs are key as these might be non-public offers by millers however getting a million tons of U.S. wheat won’t be an issue for us,” mentioned an affiliation official, declining to be named as they weren’t authorised to talk to media.
Australia provides a couple of quarter of Indonesia’s wheat and will lose a number of hundred thousand tons in gross sales, mentioned three Australian-based grains merchants, although exporters additional away could also be impacted extra. It exported 3 million tons there in 2024, the nation’s statistics bureau reported.
“If there are fewer gross sales of Australian wheat to Indonesia or Bangladesh that wheat might be going to finish up in locations additional away,” mentioned Tobin Gorey, founding father of commodities consultancy Cornucopia in Australia.
VIETNAM DEALS
Bangladesh has authorized imports of about 220,000 tons of U.S. wheat, a meals ministry official in Dhaka mentioned on July 30. Bangladesh dedicated on July 20 to import 700,000 tons of American wheat yearly to strengthen commerce ties, up from just about no purchases in 2024.
Vietnam, one of many fastest-growing animal feed markets, is more likely to import U.S. wheat, corn and soymeal, the Singapore-based merchants mentioned.
In June, Vietnam’s agriculture ministry mentioned companies will signal memorandums of understanding to purchase $2 billion of U.S. farm produce, together with 5 agreements to purchase $800 million of merchandise from Iowa, together with corn, wheat, dried distillers grains and soybean meal.
It’s not clear that the agreements have been formally signed.
Argentina is at present Vietnam’s main grains provider, accounting for greater than 50% of its corn and 65% of its soymeal imports over the previous 5 years.
Vietnam has elevated its U.S. corn purchases for the 2024/25 advertising and marketing yr that ends on August 31, taking 1.1 million tons, with one other 19,051 tons set for supply by the top of the month, in line with USDA knowledge.
For the 2025/26 advertising and marketing yr, Vietnamese importers have booked 134,000 tons versus solely 2,000 tons booked right now final yr for the 2024/25 interval.
FEED CORN
Thailand and the Philippines might additionally emerge as key importers of U.S. corn, the 2 Singapore-based merchants mentioned.
One of many merchants mentioned purchases tied to commerce offers might result in Thailand shopping for greater than 1 million tons of U.S. feed corn, based mostly on what could be wanted to interchange their present purchases of feed wheat from the Black Sea and feed corn from Asia.
Philippine corn purchases could possibly be larger as its wants to interchange 3.3 million tons of feed wheat, although its shopping for will depend upon reducing its corn tariffs, the dealer mentioned.
In July, after the 2 sides introduced a commerce settlement, a senior financial and commerce adviser to Philippine President Ferdinand Marcos Jr. mentioned tariffs on imports from the U.S. of corn, rice, sugar, fish, pork, and rooster haven’t been eliminated.
After saying a U.S. commerce settlement on August 1, the Thai finance minister mentioned the nation will import as much as 2 million tons of U.S. soybeans. There have been no additional particulars on the Thai soybean purchases although.
“There have been productive commerce discussions which current a chance for the U.S. to strengthen its entry to markets in our area,” mentioned Timothy Loh, the U.S. Soybean Export Council’s regional director for Southeast Asia & Oceania.
“We’re anticipating larger demand for U.S. merchandise similar to soymeal and different U.S. agricultural exports into Southeast Asia.”
Some U.S. agriculture merchandise are value aggressive with different areas. U.S. comfortable white wheat this week was provided at about $280 per ton on a value and freight (C&F) foundation, the identical as related high quality Black Sea wheat.
U.S. corn is about $10-$15 a ton lower than South American merchandise whereas U.S. soymeal is at a $5 low cost to rival suppliers, in line with one of many Singapore-based grain merchants.
(Reporting by Naveen Thukral; further reporting by Peter Hobson in Canberra, Ed White in Winnipeg, Bernadette Chrisina in Jakarta, Tom Polansek and Karl Plume in Chicago; Modifying by Christian Schmollinger)
