What makes Indian sandalwood so valuable?

In India, Indian sandalwood has a tradition spanning over 4,000 years. In 1790, Sultan Tipu declared the tree as the "royal tree“ and on the ancient Silk Road, Indian sandalwood oil was one of the most sought-after goods, which tradesmen transported from India to markets throughout distant China.

For thousands of years, many valuable raw materials have been sourced and processed from it for mostly religious, ceremonial and cosmetic applications.

Indian sandalwood oil has always been a highly valued healing agent in Ayurvedic medicine as well as in Traditional Chinese Medicine. More recently, modern medicine too has started to take note of the various healing properties of Indian sandalwood.

During the extraction of the tree’s Indian sandalwood oil through water distillation, many useful by-products and residues are won and these in turn are, for instance, used for the production of incense.

Indian sandalwood is a rare and extremely demanding plant that grows mostly in very remote regions in southern India.

Especially during the 1980’s and as a result of its high market value, the tree was illegally cut down in very large quantities and sourced over often very obscure channels from its natural habitat in India. Because of this continued and excessive over-exploitation, the Indian government placed the tree under protection as an endangered species. As a result of this, the export of unprocessed Indian sandalwood from India is now completely banned and its smuggling is severely punished.

Consequently, the legal supply for Indian sandalwood from India, where 95% of the world’s available supply used to originate from, has disappeared almost completely.

In the meantime, demand for Indian sandalwood has – for many years now - significantly exceeded the available supply, leading to growing supply shortages and double-digit price increases.

Our asset partner Quintis is currently the only supplier worldwide able to offer commercially meaningful quantities of sustainably and traceably grown Indian sandalwood. Today and for the foreseeable future Quintis therefore benefits from effectively being the monopoly supplier for this rare and therefore valuable natural resource. Through our asset partner Quintis our investors will also be able to benefit from this highly favourable structural market constellation.