Sandalwood (oil)


Sandalwood (Santalum sp.) is a fragrant wood tree producing heavy, yellow, fine-grained timber. Sandalwood trees can be grown to produce both timber and oil, with sandalwood oil being the higher value product. Both the wood and oil produce a distinctive fragrance and unlike many other aromatic woods, sandalwood retains its fragrance for decades.


Sandalwood is a semi-parasitic tree, deriving some of its nutrients from a host tree; stands of sandalwood can also provide environmental benefits. In the drier south-west of Western Australia, sandalwood (Santalum spicatum) and its hosts are native to the area and while offering a needed deep-rooted perennial to the landscape, add much sought-after biodiversity.

In the tropical north, the sandalwood species (S. album) is exotic but the hosts are generally native and together they can add a needed balance in an irrigated system threatened by salinity.

The value of the sandalwood tree is its heartwood, which is the inner core of the bole of the tree. As this core ‘dies’ within the sandalwood tree, it is filled with sesquiterpenes. These chemicals appear to protect the heart of the tree against fungi and insects but this process may just control water-balance or the proportion of live tissue the tree canopy has to sustain. A complex of up to one hundred of these sesquiterpenes make sandalwood oil and the scented wood for which the tree is known.

Sandalwood species differ in their sesquiterpene or oil profile and thus some species are more favoured than others. This choice is based on the amount of santalol and santalenes present and the lack of farnasyl, a sesquiterpene that is a skin irritant. In Australia there are two main species grown for sandalwood oil, S.album and S. spicatumS. album is the most sought after as it has high levels of santalol and santalenes and no farnasyl.

World-wide, sandalwood oil has been used as a complex. The predictability of the S. album oil profile makes it popular in high-valued perfumes. S. spicatum has ventured into this market but needs constant manipulation controlling farnasyl levels. Other species are used but are not as highly valued. The waste timber after extraction is used to manufacture joss sticks, insect repellents, potpourri and marquetry. The highest valued product is a carving log of only heartwood.

Plantation establishment has been driven by the predicted value of the sandalwood product. Plantation maturation is expected to take at least 15 years for S. album and 25 years for S. spicatum. This estimated rotation length is based on the economic balance between heartwood production, product value and time. Scarcity and sandalwood oil demand has driven product prices upwards making this a highly attractive enterprise. The risk is predicting the impact of the spread of plantations in the Pacific Rim (including Western Australia) and China, as well as the accelerated development of substituting synthetics for the natural sandalwood oil.

Australia’s sandalwood industry has a long history by domestic standards. In fact, it is one of Western Australia’s first significant export industries, with shipments of S. spicatum to China in 1844 for use in the production of incense and funeral pyres. The Western Australian industry now commands around 40% of the international sandalwood market. This demand is met exclusively from natural ‘wild’ stands in Western Australia’s rangelands with approximately 2,500 tonnes being harvested annually for export to Asia, India and Europe.

Approximately 2,000 tons of this harvest is controlled by the State Government under licence arrangements to ensure sustainable wild harvest. Areas are selected where the harvest can occur and each tree ‘pulled’ is replaced with seed buried next to a host to optimise seed germination and the chance of a parasitic relationship. The seed-burying action substitutes for the loss of native fauna (usually Woylies) acting like squirrels.

Even with this human-intervention, the impacts of climate change and the popularity of indiscriminate grazing goats on pastoral leases, has led to limited regeneration. The remainder is harvested from private land or Aboriginal Lands Trust lands. Future supply will most likely be complemented by sandalwood sourced from public and private plantations, and individual farmers.

Sandalwood plantations are expanding in Western Australia. While still highly experimental, the tree is proving popular due to its high value and survival in the harsh environments of northern Australia and the south-west of Western Australia. Supported with managed-investment-scheme funding from the Federal government, a commercial S. album plantation has been established in the Ord region of Western Australia.

Even larger plantations have been established in the dry south-west with S. spicatum, mainly by farmers. Plantings of S. album have started in the tropical north of the Northern Territory and Queensland and another native species of sandalwood (S. lanceolatum) grows and is being further developed in Queensland.

Facts and figures

  • Sandalwood value is in the production of bole heartwood which is filled with sesquiterpenes which make up the complex sandalwood oil
  • Sandalwood has been used for religious and cultural purposes in Asia for centuries
  • Sandalwood oil is used in perfumes, and beauty products, while the heartwood is used for carving and the waste produce for burning either as insect repellents or joss sticks
  • Two species of sandalwood are native to Australia – S. spicatum in the south-west of Western Australia and S. lanceolatum in Queensland. S. album is regarded as an exotic, and grown in the north of Australia, mainly Kununurra
  • The Australian sandalwood industry commands around 40% of world market share

Production status

Commercial production of sandalwood is currently based in Western Australia with some new plantations being developed in North Queensland and the Northern Territory. Trials have also been established in New South Wales, South Australia and Victoria.

Approximately 2,000 tonnes of S. spicatum was harvested from natural ‘wild’ stands in the Rangelands region of Western Australia. The 13,500 hectares of sandalwood under production on farms in the Western Australian wheatbelt lay the foundation for an alternative agricultural industry for many farmers. The plantings of sandalwood in Western Australia’s agricultural zone has increased steadily since 1999 with estimates that the estate is likely to reach 50,000 hectares by the year 2020.

Around 6,000 hectares of Indian sandalwood (S. album) have been established on irrigated land in the Ord River Irrigation Area in Western Australia, mainly funded by managed investment schemes. The first harvest was undertaken in 2012, and while under-age the heartwood was reported to be of good quality.

Plantations of Indian sandalwood are also planted in tropical north Queensland and in parts of the Northern Territory around Katherine. To date the species has been established and maintained on irrigation, defining its distribution.

Another native species of sandalwood, S. lanceolatum, grows in Queensland. It has not, as yet, been commercially developed as S. album is now being grown in the region. Wild harvest of S. lanceolatum from Crown lands in Queensland has remained at around 300 tonnes per annum over the last decade.

There are approximately 400ha of trial plantations of both S. spicatum and S. album in New South Wales, South Australia and Victoria.

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Map of current and potential growing regions


Sandalwood oil is used in some of the world’s most famous perfumes, aromatherapy products, soaps, shampoos, bath oils and lotions. Due to its perceived antibacterial and anti-inflammatory properties, the oil also has nutraceutical applications.

In Australia, there is also a developing market for sandalwood seed produced by S. spicatum. This species produces a large nut (seed) from the age of four years and products are being developed from the fatty acids contained within the kernel.

Sandalwood can also provide environmental benefits to farmers, including the ability to use excess water in the landscape thus regulating the presence of salinity and waterlogging, reducing soil erosion and providing habitat for native birds and animals. As it is a hemi-parasite, together with its hosts it provides needed biodiversity.

Production Requirements

Growing regions

Sandalwood is currently grown in Western Australia, Queensland and the Northern Territory with trials being conducted in New South Wales, South Australia and Victoria.

Australian sandalwood (S. spicatum) will grow in low rainfall areas and is not necessarily limited by soil type, but as it requires a host tree, the growing region needs to support both the host and sandalwood trees. Trees native to the selected area are favoured as host trees as they are better suited and adapted to the environment. Sandalwood can be grown with water from natural rainfall or under irrigation, however the added costs of irrigation must be considered when calculating potential returns. Indian sandalwood (S.album) needs irrigation as the rainfall in the north of Australia is seasonal and insufficient.

Soil type

Because sandalwood is a root hemi-parasite, it requires a host tree for healthy growth. The soil type must take into account the needs of both trees, more particularly the host. Hosts will change with soil type and hence the native trees of the region are favoured due their suitability and superior adaption.

For S. spicatum, the preferred soil type in the Western Australian wheatbelt is a sandy-loam over clay. However, sandalwood will also grow on some loamy-gravels, yellow sands and red sands. Moisture retention and availability at both the surface and subsurface are important for the establishment of sandalwood.

For S. album, it was thought that a defining characteristic was the need to be in soils that did not attract termites and thus the cracking Cununurra clays were favoured. This however is being questioned with excellent growth being attained in all soil types.


S. spicatum (Australian Sandalwood) will grow in low rainfall areas between 400-800mm per annum. Stocking rates will depend on rainfall levels, so while sandalwood will grow in areas with less than 250mm of rain per annum, growth rates are better in a 400–600mm rainfall zone.

S. album (Indian Sandalwood) grows in similar rainfall as S. spicatum in Kununurra as the area receives 800mm per annum. The difference is that this species is grown with irrigation. To contrast this, in Kerala, India where the species is grown without irrigation, the annual rainfall is 2800mm + 400mm, suggesting that there is potential to grow this species in higher rainfall areas.


There are two main species of sandalwood grown in Australia for oil production, S. spicatum (Australian sandalwood) and S. album (Indian sandalwood). Tree breeding programs have been established for both of these species and the seed produced will only be used in plantation establishment and not in wild harvest, in order to conserve genetic integrity.

The relative narrowness of the genetic diversity in S. album compared to other sandalwood species accounts for the predictable oil profile. The wide genetic diversity of S. spicatum makes the opportunities for developing and improving this species a slow but attainable goal.

For information on suppliers of sandalwood seed contact the Forest Products Commission.

Planting and crop management

Sandalwood trees are root hemi-parasites, meaning they require host trees for healthy growth. The host trees provide extra water and nutrients to the sandalwood delivered by a unique root connection called haustoria. The symbiotic relationship persists throughout the life of the sandalwood tree. In Western Australia, the best host species are the nitrogen-fixing plants.

Land preparation is vastly different between S. spicatum growing in the south-west of Western Australia compared to the present system for S. album in Kununurra.

In the south-west Western Australia, in sandy soils and without the requirement for irrigation, general farming equipment can be used for preparing the land, controlling the weeds and deep ripping. The first step in plantation establishment is to plant the host trees at 1.6m intervals (1,250 hosts/ha). Sandalwood seeds can be sown once the host trees are 1–2 years old, or around one metre tall. Once adequate soil moisture is achieved, for example after a rainfall event, one or two seeds are sown about 2–3cm below the surface, at a distance of half a metre away from the host tree.

Approximately two weeks later, the seed planting area is sprayed with a knock down herbicide ensuring no spray touches the host plant. Weed control is vital prior to sandalwood seedlings emerging as they are easily smothered reducing survival and growth. Sandalwood seeds will take 4–8 weeks to germinate after good rains and normally emerge 3–4 months after planting.

When the sandalwood tree is two years old, an assessment of its ratio to hosts should be undertaken. Sandalwood should have a 1:2 or 1:3 ratio with its host, in other words, 1,000 hosts per hectare will support 400 sandalwood trees per hectare, at two years. For S .spicatum tree bole development, regular light pruning is required to maintain a single stem. Thinning may be required as the trees-per-hectare needs to be kept in balance with the presence of hosts and in relation to the water table to avoid tree death.

Site management thereafter depends on whether the S. spicatum sandalwood nut is harvested annually. Seed markets are developing as the kernel contains many fatty acids, particularly ximenynic acid that has excellent dietary and cosmetic uses. For cost-effective seed harvesting, the plantation floor under the trees needs to be maintained relatively clean for seed collecting equipment.

In the case of S. album, the cracking Cununurra clays and the requirement for irrigation makes the silviculture a greater challenge. As there is no shortage of water, the sites can be planted at higher stocking rates. The higher the stocking rate, the less bole wood produced per tree so there is a balance.

The land preparation is intensive with the site requiring laser-levelling due to the flood irrigation requirement. Even with the introduction of trickle irrigation, this step has not been dropped from the preparation as flood irrigation may be required at some stage in the rotation. The trees are planted at a distance of 1.8m multiples apart as this is the agriculture system that the valley has adopted. For S. album, it is normally planted at 3.6m apart.

S. album is established using seedlings. The host requirement to support the full rotation of this sandalwood is still under investigation. Commonly, the plantation system relies upon three hosts, a pot host introduced as the sandalwood seedling is grown in the nursery, a short-term host which dies after three years and a long-term host which lives together with the sandalwood for the full rotation. The best short-term and long-term hosts have been identified as nitrogen-fixers, either legumes or casuarinas.

Weeds, pests, and diseases

Weed control in plantations is particularly important before planting, to reduce competition with emerging seedlings and seedling growth. Thereafter, the weeds can become hosts but need to be kept in balance with the resources (water and light) available.

Consideration will need to be given to any pests and diseases of the selected host tree. The S. spicatum host, an Acacia, can be susceptible to a range of pests including gall rust, mistletoe, and sap sucking insects such as aphids. Selection of the Acacia species and variety together with a managed planting density can reduce stress and the onset of these diseases. Alternatively, planting a diversity of host plants should guard against the severity of a pest or disease event.

Infrastructure Requirements

As soil preparation will be different depending on the species selected, infrastructure can range from general farming equipment to laser-levelling services (if growing under irrigation).

Sandalwood can also be grown under irrigation, so an irrigation system and access to a water supply will be required in these instances.

Harvesting & Processing

The valuable oil and timber are contained within sandalwood’s heartwood, which only starts to form after four years of growth. The decision to harvest is based on the bole-size of the tree, the amount of heartwood formed, the investment in the trees and the expected price of the tree. The longer the tree remains in the ground, the greater the heartwood formation and tree value.

Australian sandalwood (S. spicatum) produces a potentially valuable nut (seed) from the age of four years. This may provide an additional income to growers as products are developed from the fatty acids contained within the kernel.

Wild sandalwood cannot be assessed for its age due to its parasitic nature and the lack of growth rings. However, based on known history, S. album harvest in India is estimated to be between 40–50 years of growth and in Western Australia, S. spicatum after 80 – 100 years. Plantation sandalwood has been calculated to be commercially viable after 15 years for S. album and 25 years for S. spicatum. Plantation trees from Kununurra show that S. album after 15 years has only 30% of the bole filled with heartwood and this is rapidly increasing with a longer rotation length.

Sandalwood is harvested by pulling the whole tree from the ground and then quickly removing the bark. Heartwood formation starts at the base of the bole of the tree and thus this area, and a short distance into the roots and up the bole, has the highest sandalwood oil content.

To remove the bark, the tree is tumbled which also removes soil from the roots. It is in this form that the tree is delivered to the processing plant for wood quality assessment and classification. For S. album, the clay soils in which this species grows are more challenging to remove.

For both plantation-grown S. spicatum and S. album, the sapwood needs to be separated from the heartwood and visionary machinery is being developed to do this.

Markets & Marketing

The two main species of sandalwood traded in world markets are S. album (Indian sandalwood) and S. spicatum (Western Australian or Australian sandalwood).

While Indian sandalwood has a higher value, the price of Australian sandalwood has steadily increased over the last decade, indicating an unsatisfied demand worldwide. This is due mainly to dwindling stocks of Indian sandalwood caused by unstainable harvesting over a long period in its native environments in the Pacific Rim.

The Forest Products Commission through its selected agent, undertakes processing and marketing of the wild S. spicatum in Western Australia on behalf of the Government. The remainder harvested from private and Aboriginal lands is directly delivered to processing factories in Western Australia.

Approximately half of Australia’s sandalwood harvest is exported as logs for overseas processing in south-east Asia. The remainder is sent to the processing factory in Australia for the oil to be extracted and other incense products prepared from the waste for local sale but mainly exported to Europe and the Middle East.

The largest importers of sandalwood oil are the United States, France and the Middle East where consumers pay high prices for the niche product. However, in 2006 there was a drop in demand and oil prices as a result of customers substituting the product for lower quality synthetic sandalwood oil, illustrating some of the risks involved in sandalwood production. However, since the uses for sandalwood are so diverse, fluctuations in a single market use will not necessarily affect the overall demand for the product.

Risks & Regulations


Sandalwood plantations, both commercial operations and farm scale plantings, have been established in response to strong international demand for sandalwood and dwindling international supplies. Australia is an established supplier of sandalwood timber and oil in the S. spicatum market.

S. spicatum in the south-west of Western Australia is suitable for farm forestry and may provide a high value end product, making it an attractive option for many farmers and investors. S. album in the Ord Irrigation scheme has not been as popular. Horticulture neighbours suspect the sandalwood planation system of spreading a virus to their cucurbits through aphid infestations. Furthermore, sandalwood is accused of occupying highly valuable irrigated land that should be used for a food crop.

When the sugar industry closed in Kununurra, sandalwood was the alternative choice and as yet no other crop is showing signs of economically competing. The managed-investment-system funding model has artificially created this economic advantage and the shift to alternate funding sources, as well as the product-production performance from the first rotation, will determine the sustainability of the sandalwood industry in the Ord river irrigation scheme.

Market saturation is a consideration when the plantations start maturing. It is predicted that the plantations in Kununurra alone will meet current world demand. Perhaps a greater threat to the market, is the use of additives or supplements to extend the oil or, in some cases, totally replace the natural oil. A concern of one sandalwood oil supplier is that there are now so many synthetics marketed as sandalwood oil that many people do not know the sandalwood oil fragrance. Continuity of the complex, tree-produced sandalwood oil is critical to maintain markets and counteract the entry of synthetics.

This creates great pressure on the performance of the current plantations established. In most cases, the first plantings are completely experimental, and these are the plantings which are now being relied upon to meet performance requirements for a fledgling industry. Plantation sandalwood is the youngest of the plantation industries to be commercialised in Australia. More importantly, the research undertaken in Western Australia pioneered world-thinking on the domestication and growing of a parasitic plant in plantation.

The market for sandalwood is considered to be a niche market, meaning it is price sensitive to fluctuations in supply and demand. Research into product development is needed to broaden this product base, especially into the neutraceutical and medical markets.

In many plantation systems, risk is associated with mills closing or relocating, leaving plantings at an uneconomical distance from processors. With the minimal processing required for sandalwood prior to being marketed, this is not a concern.

Regulatory considerations

Since the 1920s, the Western Australian Government has regulated the harvesting and processing of sandalwood taken from natural or wild stands. The harvesting of sandalwood on Crown land (including pastoral leases) is regulated by the Sandalwood Act 1929Wildlife Conservation Act 1950 and Conservation and Land Management Act 1984. The Forest Products Commission manages sandalwood harvesting through its agent, who is also responsible for regeneration, marketing and developing the sandalwood industry – both in plantations and in natural resource areas.

Harvesting of sandalwood from private property is managed by the Western Australian Department of Environment and Conservation (DEC) and a licence is required. A licence is not required to harvest sandalwood grown on a plantation or in a private tree farm on a property, however any interested party should check their status prior to planting any trees.



Emerging animal and plant industries: Their value to Australia RIRDC report (2014)

Preparation and Planning for your Sandalwood Plantation Australian Sandalwood Network

Plantation Layout and Site Preparation for your Sandalwood Plantation Australian Sandalwood Network

Sandalwood Establishment Australian Sandalwood Network

Ongoing Management of Sandalwood Plantations Australian Sandalwood Network

Natural Resource Management Benefits of incorporating Sandalwood into your farming system Australian Sandalwood Network

Heartwood Rot Identification and Impact in Sandalwood (Santalum album) RIRDC report (2010)

Market Opportunities for Farm Forestry RIRDC report (2008)

Analysis of Plant-Host Relationships in Tropical Sandalwood (Santalum album) RIRDC report (2008)

Australia’s Sandalwood Industry RIRDC report (2006)

Native Sandalwood Industry Strategy Forest Products Commission

Other resources

Forest Products Commission

Image Gallery

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Santalum spicatum (image courtesy of Australian National Botanical Gardens - photograph by M. Fagg)

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Vanilla, lavender and sandalwood oils

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Santalum Album