As China’s influence as a key player in global commodity supply chains grows, so too does its responsibility in shaping sustainability outcomes at the source.
China’s demand for palm oil has surged in recent years, with growing volumes being sourced directly from major producers in Southeast Asia. Consistently strong trade ties have been maintained with exporters in Indonesia and Malaysia, while Thailand – now the world’s third largest exporter of palm oil – sees China as one of its major export markets.
Yet at the same time, deforestation linked to palm oil cultivation continues in these key Southeast Asian production hubs. Even as the latest data shows a decline in primary forest loss in 2024 in both Indonesia and Malaysia, many of the losses are still occurring next to oil palm plantations, small-scale farms and protected areas.
Against this backdrop, stakeholders at the recent Roundtable on Sustainable Palm Oil (RSPO) China Forum in Guilin, Guangxi, highlighted the urgent need to bridge the gap between producers and buyers through stronger upstream relationships and traceability. Industry players spoke about how deeper engagement with suppliers and smallholders will be the next frontier for China’s sustainable palm oil ambitions.
“Supply chains are extremely complex, especially when it comes to traceability,” said Tor Mooi-see, sustainability director at Apical Group, a major supplier of palm oil derivatives with operations spanning Southeast Asia and a growing presence in China’s consumer goods supply chain. Tor called on Chinese downstream brands to actively collaborate with midstream processors and upstream plantations to strengthen transparency and look into providing micro-financing support to smallholders.
Smallholders in Southeast Asia, who collectively manage a significant portion of palm oil plantations, often face limited access to financial resources. Without adequate funding, many smallholders struggle to implement best practices that reduce environmental impact and improve yields, as well as to meet certification requirements such as RSPO.
Tor added that in Southeast Asia, awareness of the importance of No Deforestation, No Peat, No Exploitation (NDPE) commitments among smaller suppliers remains weak. Chinese buyers, working with RSPO, can support these small and medium-sized enterprises or producers.
“RSPO has a strong presence among downstream companies and consumers, which can help influence producers, especially when paired with financial and technical support from buyers,” she suggested.
The RSPO’s landscape and jurisdictional approach, which focuses on engaging multiple stakeholders across entire producing regions, was highlighted as one promising pathway. Tor also emphasised that China, due to its market scale, could catalyse a “chain reaction” of sustainable transformation if it chooses to work closely with palm oil producers.
Zhang Daopeng, general manager of public affairs at Yihai Kerry Group, a major agrifood conglomerate which owns some of China’s best-known consumer brands, echoed the need for closer buyer-supplier interaction. “It’s important to see plantations and processing facilities firsthand,” he said. “Only then can companies truly understand the sustainability challenges on the ground.”
Yihai Kerry Group is a subsidiary of Singapore-headquartered Wilmar International.
Adding a regional perspective, Asanee Mallamphut, managing director and head of Asia Pacific at SD Guthrie, and president of the Thailand Alliance for Sustainable Palm Oil (TASPO), noted that Thailand – though a relatively small producer – has seen its exports of certified sustainable palm oil to China grow. Currently, only 5 per cent of Thailand’s palm oil exports are RSPO-certified, but Asanee said TASPO, which brings together nearly 70 stakeholders across the Thai palm oil supply chain, is working to raise certification rates.
“Most of Thailand’s production comes from smallholders, so building capacity at that level is critical,” he suggested.
Palm farmers and members of TASPO at the RSPO Thailand booth at SUGAREX Thailand 2025. RSPO has been trying to raise awareness of RSPO-certified palm oil cultivation among local farmers and business operators. Image: TASPO
Benefits of improving procurement policies
In an interview with Eco-Business, Zhu Chunxian, director of quality assurance at Shanghai Ezaki Glico Foods Co. Ltd, the Chinese arm of Japanese snack maker Glico, reinforced the importance of aligning its operations with key sustainable sourcing policies introduced by the group. While China has no specific sustainable palm oil sourcing requirements, Zhu noted that Glico’s headquarters had made a public commitment to sustainable procurement of raw materials in 2022. Among these, palm oil is of notable concern because of its connection to environmental degradation.
Shanghai Ezaki Glico Foods first entered the Chinese market in 1995 and became a RSPO member in 2019. Zhu said beyond relying on suppliers’ claims, the company is increasingly keen on making site visits to plantations and refineries in Southeast Asia to better understand how production and refining of RSPO-certified palm oil works and to assess how effective certifications are in practice.
Zhu Chunxian, director of quality assurance at Shanghai Ezaki Glico Foods Co. Ltd, speaking at the RSPO China Forum. Image: RSPO
Translating abstract second-hand knowledge into real understanding and engagement is also critical for the company to be able to communicate more credibly about deforestation in Southeast Asia and the value of sustainable palm oil to its consumers, suggested Zhu.
Looking ahead, Zhu expects RSPO to organise more such visits so that buyers are able to deepen their ties with suppliers and producers. As adopting the use of sustainable palm oil invariably raises procurement costs for Chinese buyers, she said that better strategic cooperation with downstream suppliers and producers can help bring the costs down, such as by establishing longer-term contracts.
In a keynote presentation at the RSPO China Forum, Kirjane Ngu, project lead for supply chain transformation (Asia) at global nonprofit Earthworm Foundation, also spoke about the extent of deforestation in Southeast Asia, highlighting that Indonesia has lost nearly 10 million hectares of tree cover – especially in regions such as Kalimantan and Papua – over the past decade, while Malaysia saw losses of about 3 million hectares, particularly in Sarawak and Sabah.
Drawing attention to China’s growing influence in countries or regions where palm oil is sourced, Kirjane said that stronger collaboration between Chinese buyers and Southeast Asian producers could help address these socio-environmental challenges more equitably.
WWF China’s representative Yu Xin explaining how CSPOA engages with smallholders across Southeast Asia. WWF China serves as the secretariat of CSPOA. Image: RSPO
Yu Xin, sustainable consumption and supply chain project coordinator at WWF China, which serves as the secretariat of the China Sustainable Palm Oil Alliance (CSPOA), agreed with the need for stronger buyer-supplier relationships. The alliance is behind multi-stakeholder initiatives to promote sustainable palm oil sourcing in China and currently has 26 ongoing projects that support producer countries.
It has also engaged over 70,000 smallholders across Indonesia and Malaysia and provided them with capacity building support. These projects include improving palm plantation practices, farm water management, raising overall sustainable management levels, and helping smallholders participate in credible sustainability certification.
Yu Xin argued that these efforts offer more than just improved supply chain traceability; they also allow for smallholders to access premium prices commanded by certified sustainable palm oil. She stressed that strategic cooperation between buyers and producers, under initiatives like CSPOA’s upcoming Roadmap 2030, will be critical in scaling both the environmental and economical impact of scaling sustainable palm oil use.
RSPO’s annual Roundtable Conference (RT) will be held at the Shangri-La Kuala Lumpur, Malaysia, from 3-5 November 2025. Get more details here.
