BUNDABERG sugar may end up in households in Indonesia with a trade deal likely to be set in stone by the end of the year.

Prime Minister Malcolm Turnbull announced the deal for Australia farmers and in particular sugarcane farmers reaching an agreement with Indonesian President Joko Widodo on his recent visit to Australia.

The agreement will lower tariffs and ease restrictions, bringing them into line with Thai growers who were given a lower tariff rate in 2015.

Mr Turnbull took to Facebook, saying the move would "make it easier for more quality Australian sugar and beef to be exported overseas.”

"A win for farmers and good for the economy.”

Queensland Sugar Limited, which exports Bundaberg sugar, welcomed news of the Indonesian tariff changes.

QSL trading and risk general manager Dougall Lodge said Asian sugar consumption was growing, with the region's supply in deficit.

The Australian sugar industry welcomed the tariff agreement saying it would put sugar exports on a par with other regional competitors.

"Indonesia is an important and growing market for our export sugar,” the chairman of the Australian Sugar Industry Alliance Trade Committee Paul Schembri said.

"Reducing the tariff on Australian sugar to 5% will make our product more attractive to Indonesian food manufacturers and refiners,” he said.

"We have been at a disadvantage since Thai exporters were granted a 5% tariff in 2015 while our tariff stayed at effectively 8%.

He said Australia provided roughly one-third of all Indonesian sugar imports during 2014 and 2015 but the tariff preference meant Indonesia moved to source almost all of its raw sugar imports from Thailand.

"We lost about $500 million in trade opportunities at current prices,” he said.

The Australian Sugar Industry Alliance Trade Committee has worked since 2015 to have the tariff disparity between Australia and other sugar exporting nations resolved.

"As an export-dependent industry, with 80% of our annual production heading to overseas customers, we need to be able to compete fairly in all markets,” Mr Schembri said.

"We thank the Australian Government for pursuing this on our industry's behalf and carrying it through to a successful outcome.”