Southeast Asia Grain Import Demand Expands as CPTPP Preference Gap Over U.S. Origin Remains Underutilized

Folder: Asia Intel Date: May 7, 2026

The Structural Condition

Southeast Asia’s grain and oilseed import demand is expanding on the back of growing livestock, aquaculture, and food processing sectors across Vietnam, Malaysia, the Philippines, Thailand, and Indonesia. The structural driver is not a single policy event but a compounding set of conditions: rising middle-class protein consumption, urbanization accelerating flour and noodle demand, and the absence of meaningful domestic grain production across the region.

Canada holds preferential tariff access to Vietnam and Malaysia through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force for Canada on December 30, 2018. Under CPTPP, Vietnam eliminated tariffs on 31% of agricultural tariff lines at entry into force, with 67% eliminated within 15 years; Malaysia eliminated tariffs on 92% of lines. Pre-CPTPP, Canada faced average agricultural tariffs of 17% in Vietnam and 10.9% in Malaysia, according to Global Affairs Canada. The United States — Canada’s primary competitor on wheat — is not a CPTPP member and faces those tariffs in full. That structural advantage exists today and is not fully reflected in Canadian export volumes to the region.

At the same time, the 2025 China canola tariff shock forced Canadian canola away from its dominant export channel and into active diversification. Canola meal shipments from Canada to Vietnam and Thailand increased measurably in the August–November 2025 period, per AAFC data, as Canadian crushers sought new destinations for the record 21.8-million-tonne 2025 crop. The combination — structural tariff advantage plus supply redirection pressure — makes Southeast Asia the most consequential emerging diversification corridor for Prairie grain and oilseed producers in 2026.

Sources:

Global Affairs Canada — CPTPP and Canada’s Agriculture and Agri-Food Sector;

AAFC — Outlook for Principal Field Crops, April 2026

What the Markets Are Reflecting

Wheat — Vietnam and the Philippines showing volume

AAFC’s July 2025 Principal Field Crops Outlook reported that Statistics Canada trade data for August 2024 to May 2025 showed Canadian wheat exports to Vietnam up 351,000 tonnes year-over-year and to the Philippines up 340,000 tonnes year-over-year. Both were among the largest positive country-level movements in Canada’s wheat export program during that period.

Vietnam’s total wheat import demand for MY 2025/26 is forecast by USDA FAS at 5.6 million tonnes (MMT), consistent with the 5.72 MMT estimated in MY 2024/25. Milling wheat imports grew 18% in the first half of 2025 while feed wheat imports declined 7%, according to USDA FAS Vietnam Grain and Feed Annual (April 2025) — a quality signal favourable to Canadian Canada Western Red Spring (CWRS). Australia holds the largest milling wheat share in Vietnam but USDA FAS noted it has been losing market share to Canada and the United States. Canadian CWRS, under CPTPP, enters Vietnam at a tariff advantage over U.S. Hard Red Winter and Soft Red Winter. That competitive positioning has not yet translated to dominant market share but is directionally positive.

Canola — meal redirection underway, oil access remains limited

Canada’s top canola export markets in 2024-25 were China (4.6 Mt) and Japan (1.7 Mt), per AAFC October 2025 data, with the EU, Mexico, and UAE following. Southeast Asian markets — Vietnam, Thailand, Malaysia — did not appear in the top tier for canola seed or oil. However, with Chinese tariffs reducing seed export flow by over 90% in the first four months of 2025-26, Canadian processors moved to alternative channels. AAFC reported canola meal exports to Vietnam and Thailand increased in the August–November 2025 window alongside sharp growth to the EU and U.S.

Canola meal is the entry point. Demand is driven by Vietnam and Thailand’s expanding livestock and aquaculture feed sectors. AAFC identified South Korea, Thailand, and Vietnam as collectively importing $556 million in canola meal (1.3 million tonnes), with CPTPP tariff reductions and a future Canada-ASEAN FTA cited as the structural mechanism to increase that volume. Canola oil access to Southeast Asian food markets is less developed — Malaysia and Thailand import canola oil but volumes from Canada are marginal. Palm oil dominates regional cooking oil markets and price competition is intense.

Competitor Landscape

Australia is the primary competitor across Southeast Asian wheat markets and the most significant structural barrier to Canadian market share growth. Australia holds established buyer relationships in Vietnam, the Philippines, Malaysia, and Indonesia built over decades and reinforced by proximity — freight from Western Australia to Southeast Asian ports is materially shorter than freight from Vancouver or Prince Rupert. ABARES confirms Australian 2025-26 wheat production at near-record levels nationally, with Western Australia alone at 13.4 MMT, up 6% year-over-year. Australian wheat diversified broadly across Southeast Asia in 2025 following reduced Chinese demand. That supply is abundant, competitively priced, and moving. For Canadian milling wheat, competing on quality specification and CPTPP tariff advantage is the realistic path — competing on freight economics is not.

On canola, Australia’s position in Southeast Asia is structurally weaker. The dominant share of Australian canola exports in 2025 went to European biofuel markets, not Asian food markets, per ABARES data. This is not a temporary shift — Australia’s low-carbon-intensity, non-GM canola profile is aligned with EU sustainability mandates, and that pull is durable. Australian canola is largely not competing with Canadian canola for the same Southeast Asian buyers at the volume level that matters for Prairie producers.

Ukraine supplied approximately 20% of Vietnam’s wheat imports in MY 2024/25, making it the second-largest supplier. Supply risk from ongoing conflict is a standing variable — any disruption to Ukrainian export capacity tightens the competitive window for Canadian wheat in Vietnam. Ukraine does not have CPTPP access.

U.S. is Vietnam’s fourth-largest wheat supplier and growing, despite facing full pre-CPTPP tariff rates that Canada does not. The U.S. competitive position on price and freight partially offsets the tariff disadvantage. Canadian exporters should not treat U.S. origin as absent from this market.

Brazil and Argentina — Brazil is now the third-largest wheat supplier to Vietnam by volume, competing primarily at the feed wheat price tier where Canadian CWRS does not typically compete. Argentina is forecast to have record wheat production in 2025-26 per USDA WASDE, and is actively growing its Asian export program. Price-sensitive feed wheat buyers in Southeast Asia will be well-supplied from Southern Hemisphere origin.

Source:

ABARES — Australian Crop Report

Prairie Producer Implications

Wheat producers — The Vietnam and Philippines volume increases documented in AAFC’s 2025 data are a confirmation signal, not a projection. Those tonnes moved. The question for 2025-26 and beyond is whether Canadian wheat exporters can build on them systematically. The CPTPP tariff advantage over U.S. origin is the durable structural tool. Milling wheat producers delivering high-protein CWRS have the best competitive positioning in Vietnam’s growing flour milling sector. The risk is that Australian supply abundance keeps price pressure high enough to compress basis at Vancouver and Prince Rupert regardless of volume growth.

Canola producers — Southeast Asia is a canola meal story in the near term, not a canola seed or oil story. Canola meal is moving to Vietnam and Thailand as Canadian processors redirect from the China channel. This is demand absorption that partially offsets the China tariff hit, but at lower value than seed exports. Prairie producers should watch crush margins and domestic processing capacity utilization as the primary price transmission mechanism — what happens at the crusher matters more for farm price than the destination of the meal.

Both commodity groups — The Canada-ASEAN FTA negotiations flagged in AAFC’s 2025-26 Departmental Plan are relevant to watch. A concluded agreement would extend CPTPP-style tariff access to the ASEAN members not currently covered. Indonesia alone imports approximately 10 MMT of wheat annually and is the world’s second-largest wheat importer by volume. Market access to Indonesia at preferential tariff rates would be a material development for Prairie wheat producers.

Opportunity and Risk Flags

Opportunity — Vietnam milling wheat: If Canada’s milling wheat market share gains in Vietnam continue at the pace suggested by 2024-25 Statistics Canada data, and CPTPP tariff phase-out schedules advance, Canadian CWRS could establish a durable presence in the Vietnamese flour milling sector within 2–3 crop years. The quality premium and tariff advantage are both on Canada’s side if the price spread to Australian origin remains manageable.

Opportunity — Canola meal, Thailand and Vietnam: If record Canadian crush continues through 2026 and Chinese canola meal access remains partially constrained, Southeast Asian feed markets are the logical redirection destination. Thailand and Vietnam’s aquaculture sectors are expanding and protein meal demand is price-responsive.

Risk — Australian wheat surplus: If Australia’s 2025-26 wheat crop, confirmed at near-record levels, prices aggressively into Southeast Asian markets during the second half of 2026, Canadian wheat may face basis compression despite volume growth. Australian export volumes into Vietnam and the Philippines will need to be monitored weekly.

Risk — ASEAN FTA delay: If Canada-ASEAN FTA negotiations stall or produce a diluted agreement on agricultural tariffs, the structural access gap to Indonesia, the Philippines, and Thailand remains. Those markets cannot be fully served under the current CPTPP framework.

Risk — Palm oil price recovery: If global palm oil prices recover significantly, the incentive for Southeast Asian buyers to substitute canola oil into food applications diminishes. Palm oil dominates the regional cooking oil market and any canola oil inroad depends partly on palm oil supply tightness.

What to Watch

1. AAFC Outlook for Principal Field Crops — May 21, 2026: Next scheduled release. Will include Statistics Canada export volume data to approximately March 2026. Watch for Vietnam and Philippines wheat shipment figures and any new Southeast Asian canola meal destination data. Source: AAFC Principal Field Crops Reports

2. USDA FAS Vietnam Grain and Feed Annual — next release cycle: The standing GAIN report series tracks Vietnam wheat import volumes by supplier country, milling vs. feed wheat split, and feed ingredient demand. Watch specifically for Canadian share vs. Australian share in milling wheat. Source: USDA FAS — Vietnam

3. Canadian Grain Commission weekly export data: Week-by-week shipment pace from Vancouver and Prince Rupert to Southeast Asian destinations. The CGC country-of-destination data is the earliest indicator of any shift in export flow. Source: CGC Grain Statistics Weekly

4. ABARES Australian Crop Report — next quarterly release (June 2026): First look at 2026-27 Australian winter crop area intentions and early seasonal conditions. Australian supply conditions in the upcoming crop year will set the competitive baseline for Canadian wheat in Southeast Asian markets through the second half of 2026. Source: ABARES Australian Crop Report

Cross-Reference to Related WFR Coverage

• Transportation — Vancouver/Prince Rupert Export Pace — Southeast Asian wheat volume growth requires vessel lineup and throughput capacity at West Coast terminals. Any rail or terminal disruption compresses the competitive window against Australian origin.
• Tariff Watch — Canada-China Canola Trade Reset, March 2026 — The partial tariff reduction driving canola meal redirection into Southeast Asia is directly connected to the China canola trade file.
• Crop Reports — 2025-26 Canadian Field Crop Production Record — Record Prairie production is the supply-side driver of the diversification pressure into Southeast Asian markets.

Tags: CPTPP, Southeast Asia, Canadian wheat exports, canola meal exports, Vietnam wheat imports, market diversification, Prairie grain exports, Australia competition, Canada-ASEAN FTA, tariff preference

This post was produced with AI assistance. All sources are attributed and linked. Western Farm Report editorial standards apply.