The species has been listed as "critically endangered" after losing nearly 70 percent of its habitat and half its population in one generation, the World Wildlife Fund said Tuesday.
Elephant habitat is being rapidly deforested or converted for agricultural plantations, a WWF release said.
"Although as a species Sumatran elephants are protected under Indonesia law, 85 percent of their habitats which are located outside of protected areas, are outside of the protection system and likely to be converted to agricultural and other purposes," the International Union for Conservation of Nature said in its Red List of endangered species.
In the past 25 years Sumatra has lost more than two-thirds of its natural lowland forest, the most suitable habitat for elephants, resulting in local extinctions of the elephant from many areas, the WWF said.
"The Sumatran elephant joins a growing list of Indonesian species that are critically endangered, including the Sumatran orangutan, the Javan and Sumatran rhinos and the Sumatran tiger," said Carlos Drews, director of WWF's Global Species Program.
"Unless urgent and effective conservation action is taken these magnificent animals are likely to go extinct within our lifetime."
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