Sandalwood Market Demand

India has long been the world’s major supplier of sandalwood. However, due to overharvesting India’s supplies of wild Sandalwood are virtually exhausted. From production of 4,000 tonnes a year in 1950, India is not expected to produce Sandalwood beyond 2008 and has become a Sandalwood importer. World demand for Sandalwood is currently around 5,000 to 6,000 tonnes a year with supply falling below this figure.

Scarcity of this highly valued aromatic wood has driven the price up from around US$ 4,000 a tonne in 1990 to over US$ 80,000 a tonne in 2006. Over the last 15 years, the price of Sandalwood has increase on average by 22 per cent per annum.

Plantations are expected to become a major source of the world’s future supply of Sandalwood. Touchwood’s plantations in Sri Lanka are ideal to grow quality Sandalwood and are located close to traditional markets in India.

The demand for Sandalwood continues to be strong. In 2008 the head of Lancome UK noted that of over 7,000 fragrances classified since 1750, 3,212 contained Sandalwood.

Recent new emerging markets in the aromatherapy and health spa industries continue to drive demand together with traditional uses such as perfumes, incense, carvings, craft and furniture.

Sources: Tamil Nadu Forestry Department, India, Lancome UK