21 February 2026, Washington: The United States and Indonesia have finalized a reciprocal trade agreement that is expected to significantly expand bilateral agricultural trade and improve long-term cooperation in food supply chains, agri-inputs, and market access. The agreement, confirmed by U.S. President Donald J. Trump and Indonesian President Prabowo Subianto, is being viewed as a strategic move to deepen engagement with one of Southeast Asia’s fastest-growing food markets.
Wider Access for Farm Commodities
A central feature of the agreement is Indonesia’s decision to eliminate tariffs on more than 99 percent of U.S. products, including a broad basket of agricultural goods. The move is expected to ease entry for commodities such as wheat, soybeans, dairy products, meat, and processed foods, which have seen rising demand in Indonesia due to population growth, urbanisation, and changing consumption patterns.
In addition to tariff removal, Indonesia has agreed to address several regulatory hurdles that had previously slowed agricultural imports. The new framework simplifies certification and labeling procedures, removes certain pre-shipment requirements, and exempts food and farm products from complex import licensing systems. These changes are expected to make trade flows faster and more predictable for exporters and agribusiness companies.
Immediate Trade Commitments and Commercial Deals
Indonesia has indicated plans to purchase more than $4.5 billion worth of U.S. agricultural products as part of a broader set of commercial agreements valued at approximately $33 billion. These deals also span energy and aerospace sectors, but agriculture remains a key component, reflecting Indonesia’s need to secure reliable food and feed supplies.
The agreement also includes cooperation to strengthen supply chain resilience, prevent duty evasion, and facilitate smoother trade in industrial materials and inputs linked to agriculture. Indonesia will remove restrictions on exports of certain industrial commodities and critical minerals, which play an important role in fertilizer production, farm machinery manufacturing, and agri-infrastructure development.
Sunflower oil futures fell to $1,515 a tonne, retreating from three-year highs reached on February 6, as expanding supplies from South America and easing seasonal demand eased the tight balance in the global vegetable oil market.
Supplies from Argentina are picking up, as Bulgarian processors bought about 400,000 tonnes of sunflower seeds at a competitive price for March delivery, while a record soybean crop in Brazil has reduced supplies of local soybean oil, increasing the choice of cheaper substitutes.
Palm oil futures, meanwhile, fell, preserving palm oil as the cheapest option for large buyers such as India and intensifying competition for market share.
Demand also fell as the Lunar New Year holidays reduced purchases in Asia, and Malaysian palm oil exports fell 11% to 15% in the first half of February, with Ramadan likely to further reduce imports from Middle Eastern countries.
The International Water Management Institute (IWMI) is contributing water-focused artificial intelligence expertise to a new UAE-led AI Ecosystem for Global Agricultural Development, launched in December 2025 in partnership with the Gates Foundation. IWMI’s involvement is delivered through the CGIAR AI Hub, where the institute is working alongside technology partners, including Microsoft, to advance AI-enabled tools for agriculture and water resilience.
The UAE initiative brings together four flagship efforts — IA|AI, the CGIAR AI Hub, AgriLLM and AIM for Scale — designed to accelerate the development and uptake of AI solutions that address food, water and climate challenges. Within this framework, IWMI is applying its scientific expertise to ensure AI tools respond to on-the-ground water realities, particularly in climate-vulnerable and data-scarce regions.
"New technologies and AI can and will be gamechangers in the management of water and water risks"
“Bringing together AI and scientific research is no longer optional if we are going to overcome looming challenges in food systems and water security. It’s how we can close persistent data gaps, understand climate risks in real time and help countries make smarter decisions,” said IWMI Director General Mark Smith. “New technologies and AI can and will be gamechangers in the management of water and water risks in agriculture and food systems.”
According to Oil World estimates, in the second half of the 2025/26 MY, sunflower seed processing volumes in EU countries, especially in Bulgaria, increased significantly due to increased imports of raw materials from Argentina.
In the first five months of the season (August to December), EU countries processed a total of 3.4 million tons of sunflower compared to 3.6 million tons in the same period of the previous season.
However, experts believe that by the end of the 2025/26 season, the volume of sunflower processing in the EU will grow to 7.7 million tons, and will amount to 1.3 million tons in Bulgaria, 1.1 million tons in France, 1.6 million tons in Hungary, and 1 million tons in Spain.
At the same time, sunflower seed imports to the EU in the 2025/26 MY will almost double compared to the previous season and will reach 1.2 million tons, of which 0.55 million tons will be supplied from Argentina.
The domestic sunflower market in Ukraine is becoming more active from the buyers’ side. This is evidenced by the data from SPIKE BROKERS in the weekly review of the oil market, as reported by agronews.ua.
According to the SPIKE Spot Index, the price of sunflower oil on CPT Odessa terms has risen to $705 per tonne including VAT. A week earlier, the indicator was $694, so the market has added $11 since the beginning of February.
At the same time, processors remain cautious in their purchases. Sales from farmers are restrained, which supports the market, but without forming a sharp growth impulse.
The global vegetable oils market remained volatile last week, but without sharp impulses. Palm oil on the Bursa Malaysia exchange decreased from 4168 to 4023 ringgit per tonne, which created a restrained background for the entire oil complex. Meanwhile, soybean oil on the Chicago exchange increased from 55.52 to 57.37 cents per pound, partially offsetting the weakness of palm oil.
In the European market, sunflower oil maintains its position. On FOB North Europe terms, March contracts are traded at $1470 per tonne unchanged from week to week, while April contracts are at $1460 with a slight increase of $5.
“Despite the correction of palm oil, sunflower oil maintains a premium over soybean oil, indicating stable demand in the European Union,” experts from SPIKE BROKERS note.
Oilseed crops became the main driver of crop farming profitability in Kazakhstan in 2025, Agriculture Minister Aidarbek Saparov said during a government meeting, noting that oilseed processing is also expanding rapidly.
According to official data, total oilseed production reached a record 4.9 million tonnes in 2025, up 48% year-on-year. Sunflower output increased by 39% to 2.5 million tonnes, flax production rose by 77% to 1.3 million tonnes, and rapeseed harvest more than doubled to 0.6 million tonnes. Farmers continue to receive subsidized loans at 5% annually for 12–15 months, with repayment rates close to 99%.
Processing development remains the next strategic step for the sector. The government is implementing a systematic program to expand oilseed-processing capacity and modernize existing plants to increase the value added of agricultural production.
In 2024–2025, four major investment projects worth 58 billion tenge were launched, providing a combined processing capacity of about 1 million tonnes. In addition, a new lecithin production line has been commissioned in East Kazakhstan Region, while another lecithin facility is expected to be launched in North Kazakhstan Region this year.
Over the next three years, Kazakhstan plans to implement 13 additional investment projects worth 94 billion tenge. These measures have already helped increase exports of value-added products, including sunflower oil shipments reaching about 600,000 tonnes, allowing the country to rank eighth globally among sunflower oil exporters.
According to the European Commission, Ukraine remains by far the most important supplier of sunflower oil to the EU-27. At the same time, feedstock supply in Ukraine is below last year's level.
From 1 July 2025 to 1 February 2026, the EU-27 imported just under 1.04 million tonnes of sunflower oil, representing a decline from 1.28 million tonnes during the same period in the previous year. Ukraine is by far the leading country of origin, delivering 0.95 million tonnes of sunflower oil to the EU so far this season.
According to research by Agrarmarkt Informations-Gesellschaft, this translates to a market share of almost 92%. However, the volume is significantly below the previous year’s level of 1.2 million tonnes, due to tighter domestic feedstock supply.
Ukraine’s sunflower seed harvest is estimated to have fallen year on year, from 13 million tonnes in 2024 to 10.5 million tonnes in 2025. This smaller crop has reduced processing volumes and limited the country's export potential for sunflower oil.
In addition, Russia's attacks on infrastructure and port facilities have put pressure on logistics. Market reports indicate that export flows have recently stabilised.
Moldova and Serbia are the second and third most important suppliers of sunflower oil, accounting for market shares of 5% and just under 2%, respectively. Moldova expanded deliveries year on year, whereas Serbia remained well below the previous year's level.
The General Administration of Customs of China (GACC) has lowered the import value-added tax (VAT) on 16 agricultural products including refined sunflower oil, crude sunflower oil and refined rapeseed oil, according to a report by the US Department of Agriculture (USDA).
Effective from 2 February, the VAT on most of the products had been reduced from 13% to 9%, the 9 February report said.
For example, a new 10-digit tariff line (1512190010) was created for “refined sunflower oil”, which was now subject to a 9% VAT during customs clearance. The product had previously been classified under HS code 15121900 and had been subject to a 13% VAT.
In addition to most-favoured-nation (MFN) import tariffs, agricultural products imported from the USA remained subject to retaliatory tariffs, the Foreign Agricultural Service (FAS)’s Global Agricultural Information Network (GAIN) report said.
Other products included in the new VAT ruling include crude sunflower oil; rice bran, fennel, walnut, peppercorn, apricot seed, grapeseed and peony seed oils; and shortenings made of vegetable fats and oils, and microbial fats and oils.