00:00So whilst we've all been talking about Iran for the last couple of days, there is some other news that
00:03has sort of been missed by the press in the last sort of week.
00:07Indonesia and the U.S. have signed a Memorandum of Understanding, which means that the U.S. will have preferential
00:14access for 2 million tonnes of wheat.
00:17Indonesia will have to buy, or attempt to at least buy, 2 million tonnes of wheat from the U.S.
00:22This is a big concern for me, because the fact is, it's about a fifth of Indonesian wheat demand will
00:29now have to go, or attempt to go, to the U.S.A.
00:34So it removes those normal market comparative forces, like our freight advantage, our quality, our reliability.
00:42The reason this has been done is Indonesia wants to get preferential trade deals for its products.
00:48It wants to reduce the tariffs that they have going into the United States.
00:51So in exchange for reduced tariffs, they have to buy U.S. agri-products.
00:56And whilst 2 million tonnes is not going to have a massive impact, it will still have an impact on
01:01our demand.
01:02The big concern is what happens if other countries, the Philippines, other parts of Southeast Asia, South Korea,
01:10if they all start looking for deals to get their products into the U.S., agri-products could be one
01:16of the deals that they preference.
01:18So this is a really big concern, and it's another sign of this protectionism impacting on traditional trade flows.
01:25And frankly, to be honest, it's just a sign that the U.S. can use strong-arm tactics to compete
01:31themselves into our markets
01:33without having to worry about quality, reliability, or freight advantages.
01:37So again, another little bad news sort of topic hitting the market.
01:42And I guess Trump said he was going to make American farmers great again.
01:46Unfortunately, it might be at the detriment of our farmers in Australia.
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