Sandalwood (wood)


For centuries, sandalwood has been used in Asia for religious and cultural purposes. The heavily scented timber and oil from Indian sandalwood (Santalum album) is used to make joss sticks for incense burning and products for traditional medicine.


Australia’s industry has a long history by domestic standards. In fact, it is one of Western Australia’s first significant export industries, with shipments of a native sandalwood Santalum spicatum sent to China in 1844 for use in the production of incense. The Western Australian industry now commands around 40% of the international market.

The Australian sandalwood is a small to medium-sized evergreen tree, growing to between 3-15 metres high. It is a root hemi-parasite and therefore requires a host tree for healthy growth. The host trees are usually Acacias, which provide water and nutrients to the sandalwood delivered by a unique root connection called haustoria.

Currently sandalwood is harvested almost exclusively from natural ‘wild’ stands in the Western Australian Rangelands. However, future supply will most likely be complemented by trees sourced from public and private plantations, and individual farmers.

The key product of value from the tree is the heartwood, which contains most of the oil and scented wood for which the tree is known. Sandalwood timber is used in a range of products ranging from incense burning joss sticks to potpourri and marquetry. Alternatively, the timber may be used to extract oil. Sandalwood oil is used in a range of products including soap, shampoos, beauty and medicinal products, and French perfumes.

Supplies of Indian sandalwood (S. album) have been declining over many decades due to unsustainable harvesting practices in its native environments of India and south east Asia. This has provided an opportunity for Australian wood to enter markets with approximately 2,000 tonnes harvested annually from native stands in Western Australia for export to Asia.

It is a developing industry in Western Australia and the tree is proving a popular farm forestry species due to its high value, good performance in low rainfall areas and environmental benefits. A commercial Indian sandalwood plantation has been established in the Ord region of Western Australia and plantings are proposed for the tropical north of the Northern Territory and Queensland. Another native species (S. lanceolatum) grows in Queensland but little is known about its status as a commercial enterprise.

The decision to use harvested trees for timber or oil is made by the processor, in response to customer demand.

Facts and figures

  • Sandalwood has been used for religious and cultural purposes in Asia for centuries
  • It has a highly fragrant timber, valued for both its wood and oil
  • The wood is used to produce joss sticks for incense burning, while the oil is used in perfumes and medicinal products
  • Two species are native to Australia: Santalum spicatum in Western Australia and S. lanceolatum in Queensland. Indian sandalwood, S. album, is also used in plantations in Australia
  • It is an increasingly popular farm forestry tree in the Western Australian Wheatbelt
  • The Australian industry commands around 40% of world market share

Production status

Major commercial production is currently based in Western Australia with some new plantations being developed in North Queensland and the Northern Territory.

Approximately 2,000 tonnes of sandalwood is harvested annually in Western Australia, most from natural ‘wild’ stands in the Rangelands region of the state. However, with an estimate 15,000-23,000 hectares under production on farms in the Western Australian Wheatbelt, it will likely develop into an alternative agricultural industry for many farmers. The area of plantings 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 2,500 hectares of Indian sandalwood have been established on irrigated land in the Ord River Irrigation Area in Western Australia, funded by managed investment schemes. Despite a survival rate of only 20% in some instances, the first harvest was undertaken in 2013 with reports of good quality product.

Another native species (S. lanceolatum) grows in Queensland but it is not an established commercial industry and information about the level of the resource available or the amount on private land is not easily known. Harvest from Crown lands in Queensland has remained at around 300 tonnes per annum over the last decade.

There are approximately 400 ha 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 is used for religious and cultural purposes in Asian cultures with around one billion joss sticks used every day to burn incense. The wood is also used in craft, as inlays in marquetry and the shavings are used in potpourri.

It also provides environmental benefits to the farmers growing the timber, including the ability to use excess water in the landscape thus preventing salinity and waterlogging, reducing soil erosion and providing habitat for native birds and animals.

Production Requirements

Growing regions

Currently Australian sandalwood is harvested from natural stands in the Rangelands region of Western Australia but there is the potential for it to become an important plantation tree crop in the state’s Wheatbelt, Midwest and Rangelands regions.

Indian sandalwood is under plantation in the Ord River Irrigation region of Western Australia and is also planted in tropical north Queensland and in parts of the Northern Territory around Katherine.

Another native species (S. lanceolatum), grows around Cape York in Queensland.

Soil type

Because it is a root hemi-parasite, meaning it requires a host tree for healthy growth, soil type must take into account the needs of both trees. The preferred soil type to grow sandalwood in the Western Australian Wheatbelt is a sandy loam over clay. However, it 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 establishment.


Sandalwood will grow in low rainfall areas that are unsuitable for conventional, annual cropping systems. However, growth rates will depend on rainfall levels, so while it will grow in areas with less than 250mm of rain per annum, growth rates are better in a 400–600mm rainfall zone.


There has been no varietal development of the species. Plantations are grown from seed that can be collected from forests (with a permit) or improved seed available from specialist nurseries. Improved seed is recommended for commercial plantings as it is selected from trees with superior form and matched to soil types.

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 two trees form a symbiotic relationship throughout the life of the sandalwood tree. In Western Australia, the best host species are the nitrogen-fixing plants, especially wattles (Acacias).

Site selection becomes crucial to the success of a plantation as both the sandalwood and the host trees’ needs must be met. Generally, it should not be grown next to large native bush areas as native animals will graze the young trees. Mounding may be required on wetter sites and sandalwood are not fire tolerant, therefore a firebreak will be necessary.

The first step in plantation establishment is to plant the host trees at 1.6 m intervals (1,250 hosts/ha). Seeds can be sown once the host trees are 1–2 years old, or around one metre tall. Seeds are generally sown at a rate of one or two seeds about 2–3cm below the surface at a distance of half a metre away from the host tree; and planting is recommended once adequate soil moisture is achieved, for example after a rainfall event. Seeds will take 4–8 weeks to germinate after good rains and normally emerge 3–4 months after planting.

Weed control is vital prior to sandalwood seedlings emerging as they are easily smothered reducing survival and growth. As part of this control strategy, each planting spot should be sprayed with a knock down herbicide approximately two weeks after planting, ensuring no spray touches the host plant.

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 per hectare, at two years.

It will continue to draw against the host trees to a point that at five years they are starting to affect the survival and performance of the host. It is important that actions to thin the sandalwood at two years were undertaken to support the hosts at this point.

Ideally, like all plantation timber, one long straight trunk will provide the biggest area of heartwood and therefore oil content, so regular pruning is advised.

Weeds, pests, and diseases

Weed control in plantations is particularly important before planting to reduce competition with emerging seedlings. Competition by weeds for sunlight, nutrients and moisture can reduce growth rates in young trees.

Native grazing animals, birds and rabbits provide the major threat to seedlings, and a new plantation should be protected by fencing or tree guards.

Acacia host trees are subject to a range of pests including gall rust, mistletoe, and sap sucking insects such as aphids. Planting a diversity of host plants should guard against the severity of a pest or disease event.

Locust plagues are known to occur in Western Australia, stripping the leaves from the hosts and sandalwood. These should be sprayed in conjunction with advice from local agronomists and the Department of Agriculture and Food.

Infrastructure Requirements

Land is the main infrastructure requirement for commercial tree growing.

If planting trees on a small scale and integrating them into the agricultural enterprise as windbreaks and shelterbelts, then manual maintenance, including pruning and thinning, can usually be managed with a chainsaw and farm equipment.

If planting a commercial plantation of high value sawlogs, then tractor-based forestry equipment may be necessary, including logging winches and chains. However, because the tree can be harvested as early as seven years of age, and grows 3–12m in height, it can be managed with existing farm infrastructure. In fact, timber logs can be transported fairly easily on the back of a conventional farm utility and trailer.

Harvesting & Processing

The valuable oil and timber are contained within the heartwood, which only starts to form at approximately year five. Therefore, while timber can be harvested after seven years, a higher value output will be available from 12-20 or more years, which is when most commercial harvest occurs.

Australian sandalwood also produces a valuable nut (seed) from the age of four years. This can provide an income to growers, however it must be noted that pruning for high quality, straight stems can reduce levels of nut production.

Timber is generally harvested when the trees are between 3-12m tall, meaning a skilled operator using a chainsaw, farm tractor and trailer, or even a farm utility vehicle may be able to undertake harvest in a cost competitive way.

The Forest Products Commission through its agent undertakes processing of sandalwood in Western Australia. Approximately half of Australia’s harvest is exported as logs for overseas processing in south east Asia. The remainder is sent as processed woodchips (mostly to India) for oil production or as other products. A processing plant in Perth opened in 2012, which manages the harvest of around 2,000 tonnes per annum but has the capacity to process around 7,000 tonnes.

The decision to use harvested trees for timber or oil is made by the processor, in response to customer demand.

While all sandalwood is currently harvested from native stands of timber in the Western Australian Rangelands, on-farm plantations will be maturing in about 5-10 years and harvest rates are expected to increase.

Markets & Marketing

There are two main species of sandalwood traded in world markets are S. spicatum (Western Australian or Australian sandalwood) and S. album (Indian 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 unsustainable harvesting over a long period in its native environments in India and south east Asia. Therefore the market for plantation grown sandalwood is considered to be strong, due to the reliability and sustainability of supply.

Approximately half of Australia’s harvest is exported as logs for overseas processing in south east Asia. The remainder is sent as processed woodchips (mostly to India) for oil production or as other products.

Traditional markets for Western Australian are Taiwan, Hong Kong and China, largely for the manufacture of incense and joss sticks. Other significant Asian markets include Malaysia, Singapore, India and Thailand.

The Western Australian Government manages the marketing and sales of sandalwood harvested in native stands. The state’s Forest Products Commission manages harvesting through licensed harvesting contractors that are allocated regions and quotas each year.

Timber grown in plantations is not subject to the same rules and marketing arrangements as trees in native stands. It is envisaged that once plantations are ready for harvest, grower groups will negotiate with potential buyers, including the Forest Product Commission, to secure markets.

Risks & Regulations


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 and sandalwood oil. The tree is suitable for farm forestry and it provides a high value end product, which makes it an attractive option for many farmers and investors.

However, several challenges and market risks associated with production have been identified. These include the risk of market saturation when the thousands of hectares of plantation are ready for harvest in the coming years; the threat of cheaper pharmaceutical substitutes for sandalwood oil; and the establishment of successful plantation developments in other countries.

While a native tree of Western Australia, sandalwood’s performance in plantations is not fully understood and silvicultural and management techniques are still being developed.

The market will probably always be a niche market, meaning it is price sensitive to fluctuations in supply and demand.

Uncertainty and risk are inherent in commercial tree operations due to the long period of time between establishment and harvest (between 7-30 years for sandalwood). Some of the risks include:

  • mills closing or relocating, leaving plantings at an uneconomical distance from processors
  • government policy changing, impacting on industry structure and profitability
  • alternative products developing, resulting in a falling demand for the timber.

Alternative benefits from commercial tree plantings should be investigated to help reduce exposure to these risks. It is recommended that a short-, medium- and long-term return or benefit be identified when considering planting commercial trees. For example, a short-term benefit could relate to carbon sequestration or watertable abatement. A medium-term benefit may be derived from the trees providing a windbreak or shelterbelt for crops and livestock, and a long-term benefit might be income from harvested timber.

To further manage risk, it is recommended that tree selection take into account the potential for local use for the timber. A timber versatile enough to be processed and used locally will limit some of the uncertainty around future markets if there are alternative opportunities to earn income. For example, local markets could include the local building and construction industry, farm uses such as fence posts, and domestic uses such as firewood.

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 Biodiversity Conservation Act 2016 and the Forest Products Act 2000. The Forest Products Commission is also responsible for commercial harvesting, regeneration, marketing and sale of wild sandalwood – both in plantations and in natural resource areas.

Harvesting 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 trees 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.

Image Gallery

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Cut of sandalwood branches

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Sandalwood seedling

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Sandalwood oil and timber products

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Sandalwood trees