Demand for Indian sandalwood is estimated at about 28,000 tons per year, which corresponds to a market value of approximately USD 3 billion. Approximately 67% of this is generated from heartwood sales, while the remainder is generated from the sale of Indian sandalwood oil.
Approximately 95% of the global Indian sandalwood supply still comes from India and an estimated 90% of this supply comes from wild and mostly uncontrolled tropical jungles and most of this supply reaches global markets as “cut” merchandise, i.e. as Indian Sandalwood which is fraudulently mixed with lesser (sandal-)woods.
Only a very small part of the Indian supply today comes from either government or privately cultivated plantations which are typically only very small and therefore of little commercial relevance.
Due to extreme poverty in the affected regions and inadequate government controls in these mostly remotely located forests, large-scale illegal logging and smuggling of Indian sandalwood trees is still taking place today. Effective state media coverage and actions by the authorities aimed at dissuading and fighting illegal smugglers has had little effect to date.
Consequently, the natural and wildly growing population of the Indian sandalwood tree in India has been almost entirely decimated in recent years and the tree has therefore been placed under protection as an endangered species by the International Union for Conservation of Nature (IUCN).
As a result of this, the Indian government has enforced strict export restrictions which since 1996 completely prohibit the export of any unprocessed Indian sandalwood.
Despite the sharp decline in official supplies of Indian sandalwood from India, illegally harvested and often “cut” (i.e. fraudulently mixed with lesser woods) supplies of Indian sandalwood still reach the global markets, often via obscure channels and via Persian Gulf states. Because of the diminished quality and traceability of these supplies, industrial customers pay significant premiums for the sustainably grown and traceable supplies of Indian sandalwood sourced from our asset partner Quintis.