JAKARTA, May 19, 2010 (AFP) - Anglo-Dutch food and cosmetics giant Unilever said Wednesday 19 May it would continue to get 65 percent of its total palm oil purchases from Indonesia, despite concerns about deforestation by the industry.

London Headquarters of Unilever - Photo : Johnathan Utz/AFP

The comment came after Unilever suspended future purchases from palm oil giant Sinar Mas in December, after Greenpeace alleged the Indonesian firm was devastating rainforests and habitats for endangered species like orangutans.

The destruction of the Southeast Asian archipelago's dwindling forests is threatening biodiversity and is the main reason Indonesia is considered the world's third biggest greenhouse gas emitter, scientists say.

"Most of the purchases under the current contract (with Sinar Mas) have already been fulfilled and the contract is due to end in weeks," Unilever Indonesia corporate secretary Sancoyo Antarikso said.

"We have not determined which company will take over the contract, but it will be an Indonesian company."

Greenpeace Southeast Asia forests campaigner Joko Arif said Unilever needed to ensure that "sustainability of forests" was a priority as it seeks a new supplier of palm oil, a key ingredient in many of the company's products.

Sinar Mas has denied allegations it is illegally clearing forests to make way for palm oil plantations, a common practice in Indonesia, which has failed to crack down on rampant illegal logging and deforestation.

Nestle, the world's largest food company, has also dropped Sinar Mas as a palm oil supplier but said Monday 17 May it would resume buying from the company if an independent audit cleared the Jakarta-based firm of improper practices.

Sinar Mas insists it is committed to sustainable environmental principles promoted by the palm oil industry body.

It has launched an audit of its practices by the Netherlands-based Control Union Certification and British Standard institute, the results of which are expected in July.

Palm oil is used extensively as biofuel and for making processed food and toiletries, but extensive plantations in major producers like Indonesia, the world's top exporter, have replaced vast tracts of rainforest.

-- Dow Jones Newswires contributed to this story --