New Britain Palm Oil has won a five-year deal to supply traceable palm oil to Ferrero, the confectioner behind Nutella and Tic-Tac, boosting what appears a turnaround in the fortunes of the campaign for sustainable crop production.

The contract, worth $100m at current commodity prices, will supply Italy's Ferrero with palm oil sourced from New Britain plantations certified as meeting global sustainability criteria.

Ferrero said the deal followed "increased scrutiny from non-governmental organisations". Greenpeace, the environmental campaign group, last year condemned Ferrero for not choosing sustainable palm oil in Nutella.

And it follows climbdowns by some other companies, including Cadbury New Zealand which has stopped using non-sustainable palm oil in Dairy Milk chocolate.

On Wednesday, Sainsbury, the UK retailer, said it would use sustainable palm oil to make digestive and rich tea biscuits,

Slow start 

However, the campaign for sustainability had appeared to get off to a slow start after its main watchdog, the Roundtable on Sustainable Palm Oil, was set up in 2004.

The World Wildlife Fund in May warned that "sluggish demand" for ethically-produced palm oil "could undermine the success of sustainability efforts and threatens the remaining natural tropical forests of South East Asia, as well as other forests where oil palm is set to expand, such as the Amazon".

The fund has cited the clearing of forests to make way for palm oil plantations as a threat to animal species including the orang-utan and Sumatra's tiger, rhino and elephant.

In August, the Indonesia-based Center for International Forestry Research criticised food manufacturers and supermarkets for paying only lip service to sustainability in buying palm oil.

Consumer demand 

Nick Thompson, the New Britain chief executive, said that both his company and Ferrero recognised "the growing demand among consumers for companies that source ethically and sustainably produced products".

New Britain, which is based in Papua Guinea but listed in London, has raised itself as a champion of sustainable palm oil, and is building a refinery in Liverpool to ensure it can guarantee the source of its supplies "from seed to plate".

Shares in the group closed unchanged at 380p.