Sandalwood Oil Indian (Santalum album) is well known in the industry as it has been used in fragrances for generations. However it is more commonly know as being from India but after years of deforestation and no replanting, India as a source is no longer viable. Plantations have been established now for 20 years and finally we are seeing small volumes of oil emerge from this species in Australia.
The Indian sandalwood plantations are in areas that are not typical of the traditional growing areas in India, but rather in tropical environments, which speeds up growth. While the benefit is that the trees grow quickly, the down side is the requirement for increased weed management to keep the trees alive.
The first significant harvest to produce Indian sandalwood oil on a commercial scale was undertaken in 2014. The good news is that the quality and odour profile of the oil is quite good and very acceptable to the fragrance industry. While the volume produced in 2014 was small, believed to be less than 1 ton, future years will see significant growth, with many forecasting annual oil production in excess of 150,000 kg if 50% of the heartwood is converted to oil. This is estimated to be four-times greater than current total production of Indian sandalwood oil in India itself. This is likely to change the dynamics of the Indian sandalwood market for many years to come.
The supply of Indian sandalwood oil from the two plantation producers continues, despite the ongoing financial instability recently reported, and with this there appears to be reasonable oil volumes available. Pricing looks to have dropped significantly from the US$4,500 being offered a year ago to sub US$3,000 per kg for small volumes and as low as US$2,600 for large volumes.
There are still issues around the stability of one of the producers but there are some indications that their future will be resolved shortly.
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