While Western Australia has set up plantations of Indian sandalwood in a big way, in its homeland, India, sandalwood production is on its last leg. The government's strict control and apathy towards sandalwood plantation in the country is well known. That and massive smuggling are said to have led to a decline in sandalwood production in the country.
Ill-treated at home Indian sandalwood (Santalum album) was once widespread in the southern peninsular region of India. But now 90 per cent of it comes from Karnataka and Tamil Nadu. Since 1792, when Tipu Sultan, the then ruler of Mysore, declared it a royal tree, Indian sandalwood has been under state government control. The state has been harvesting and marketing sandalwood exclusively but has not carried out any new plantations. In the absence of new trees and massive smuggling, sandalwood production in India has declined gradually. But there are other factors, too."Population pressure and deforestation have reduced the natural habitat of sandalwood,' said S N Rai, former principal chief conservator of forests, Karnataka. The new saplings that spring up during monsoon are often destroyed in seasonal forest fires. Besides, saplings are also susceptible to grazing.

From 4,000 tonnes in 1950, India's sandalwood production fell to 2,000 tonnes in 1990 and to about 1,000 tonnes in 2000. It is feared that production will not last beyond 2008. The world market demand of sandalwood stands at around 5,000-6,000 tonne. Of this demand, more than two-thirds is for Indian sandalwood. "This gap in demand and supply has led to an increase in prices and has, in turn, led to massive smuggling,' said Rai.

Its decline also affected local communities who were licensed by the government to harvest and transport sandalwood; sandalwood-based industries in the country have also been hit.
Aussie bonanza Taking advantage of India's laxity and increasing global demand for sandalwood, plantations outside India, especially in Australia, have flourished. This has threatened India's share in the international market and its local economy.

Australia has its own native sandalwood (Santalum spicatum). Since Indian sandalwood is better priced in the international market, it switched to growing this variety. In 1990, Indian sandalwood was priced at around us $4,000 per tonne, which went up to more than us $80,000 per tonne in 2006. While Australian sandalwood was priced at us $8,500 per tonne in 2006.

Australia started its first Indian sandalwood plantation in 1998. It took off so well that it is now set to overtake India in the total area under Indian sandalwood. In 2001, Australia had 830 hectares (ha) under Indian sandalwood plantation. By 2011, it is expected to be around 2,300 ha. "Sandalwood in India is distributed naturally in around 900,000 ha. But the actual area under sandalwood is very less as the area is mixed with other vegetation,' said Rai. Also, Australia had initially bought seeds from India, but with bigger plantations it no longer needs to buy seeds.

"India's supply is so low that it is now importing sandalwood from Australia to meet the demands of sandalwood-based industries in the country, especially for the production of sandalwood oil,' said T S Rathore, scientist at the Institute of Wood Science and Technology in Bangalore. India contributes 90 per cent of the sandalwood oil production in the world.
Half-hearted effort Fearing losing its global sandalwood market, the Karnataka government made policy changes in 2001 to allow private players to grow sandalwood (see