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Invest in Sandalwood
Sandalwood comprises trees of the genus Santalum, with 16
species growing from India, through Indonesia, Australia,
Vanuatu and Fiji. The best known species is Santalum
album, or Indian sandalwood. Santalum austrocaledonium,
which grows in Vanuatu, was the subject of vigorous trade
from 1820-1900 and small amounts are cut from wild stands
today.
The use of sandalwood dates as far back at least as the
5th century B.C. It is still extensively used in India and
China, wherever Buddhism prevails, being employed in
funeral rites and religious ceremonies. Until the middle
of the 18th century India was the only source of
sandalwood. The discovery of a sandalwood in the islands
of the Pacific led to difficulties with the natives, often
ending in bloodshed, the celebrated missionary John
Williams, amongst others, having fallen a victim to an
indiscriminate retaliation by the natives on white men
visiting the islands. The loss of life in this trade was
at one time even greater than in that of whaling, with
which it ranked as one of the most adventurous of
callings.
Currently taking sandalwood from the wild in Vanuatu is
highly regulated. The licencees are required to process
the majority of the wood harvested to produce oil. Niche
markets for Vanuatu sandalwood oil have been developed
over the past few years and these are limited
predominantly by the restrictions of the amount of wild
timber that can be cut.
Sandalwood Oil
In India, sandalwood is largely used in the manufacture of
boxes, fans and other ornamental articles of inlaid work,
and to a limited extent in medicine as a domestic remedy
for all kinds of pains and aches. But, more so now, oil
from some species of sandalwood is used in the cosmetic
industry and has been included in such perfumes as Chanel
No.5 and other leading fragrances. Vanuatu sandalwood oil
is sold for this purpose.
Market
The market for sandalwood and sandalwood oil is very tight
due to declining supply. The annual cut of heartwood has
declined every year over the past 20 years and is now
estimated at 8-10,000 tonnes. A large portion of this is
the result of illegal harvesting in India.
Prices for the oil-bearing heartwood, oil-less sapwood and
spentwood from the distillation process are at record
levels. The supply cannot be increased quickly and
inadequate numbers are being planted.
Summit Estate Ltd set out In 1996 to grow Vanuatu
sandalwood, and has succeeded in growing quality trees in
a plantation environment. Some 8,000 trees have been
established in the period since 1996. Based on this
experience, and on the supply situation, the opportunity
exists to establish 100-200 ha per year of Vanuatu
sandalwood.
At present the Vanuatu Government has issued licences to
cut 120 tonnes of natural timber per year. Over the past
six years two licensees have installed equipment and now
produce sandalwood oil. A recently commenced study of
sandalwood in Vanuatu has already highlighted the
variability of oil content in trees, both over different
locations and within localities. That has led to trials to
clone the best trees for plantation development. These
trials are being conducted at the Summit, supervised by
scientists from Australia.
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