Opportunities for the smallholder sandalwood industry in ... - ACIAR

means that significant volumes of sandalwood
from Indonesia may not be expected for at least
20–30 years.
Current production in Timor-Leste
Timor-Leste has native resources of Indian
sandalwood that have been heavily exploited in the
past (McWilliam 2001). Approximately 30 tons of
sandalwood oil were exported annually from Timor
during the 1960s, which declined to 7 tons in 1994
(Yusuf 1999). Only occasional parcels of logs from
Timor-Leste are likely to become available in the
market (McKinnell 2008). Anecdotal reports from
non-government organisations operating in Timor-
Leste have suggested difficulties in establishing
small woodlots of S. album, but the reasons for these
difficulties have not been clearly identified.
Future production in China
The development of S. album plantations in
southern China is relatively recent, but significant
progress has been made over the past 5–6 years
(Xiaojin et al. 2011). Although the climate of southern
China is subtropical, selections have been made
that are adapted to these environments, and approximately
60,000 seedlings are currently being established
annually (Kamwah 2010). These plantings will
greatly increase the supply of Indian sandalwood;
however, much of the production may be absorbed
by the growing domestic demand for sandalwood
products. The effect of this potential increase in supply
on international prices is unclear at this stage.
This development will, however, limit the potential
marketing of Australian-produced Indian sandalwood
into the growing Chinese domestic markets, since it
would be expected that these consumers would prefer
product originating in China.
Future production in Australia
Australia has seen a significant expansion in establishing
S. album plantations in recent years, managed
predominantly under large-scale managed investment
schemes. The total area planted has increased significantly,
from approximately 50 ha in 1999 to just
under 7,000 ha in 2012 (Figure 1). The first plantation
product of S. album is expected from 2014, and the
expected yields (Figure 2) will have a major, but as
yet unknown, impact on the international market.
This ‘new’ product may create greater competitions,
resulting in price decreases. It is also possible that
this product will satisfy consumers of wild-sourced
sandalwood products that are no longer available, as
well as the expanding consumer markets in China
and India.
7,000
6,000
Total plantation area (hectares)
5,000
4,000
3,000
2,000
1,000
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Year
Figure 1.
Total plantation area of Indian sandalwood (S. album) in Australia, 1999–2012 (Source: McKinnell
2008; industry estimates)
15