Red Sandalwood Cultivation & Marketing – Opportunities, Challenges And Future Prospects Size & Share Analysis - Red Sandalwood Cultivation & Marketing (2025 - 2039)

Red Sandalwood Cultivation & Market Analysis

The Red Sandalwood Cultivation & Marketing Industry is expected to grow from 2.92 Thousand metric tons in 2025 to 3.61 Thousand metric tons by 2039, at a CAGR of 1.45% during the forecast period (2025-2039).

Promoting authentic red sandalwood, enhancing the quality of artificially propagated red sandalwood, and strictly enforcing the ban on natural extraction could significantly boost demand. If these optimistic measures are taken, global demand could reach USD 210.4 million by 2039. The furniture industry is anticipated to be the primary driver of this demand, with China poised to maintain its status as the leading global market. Conversely, if the current rate of artificial propagation persists and the enforcement of the ban on natural extraction is not enforced strictly, the market opportunity could dwindle to USD 28 million by 2039. Key forest tracts are located mainly in Andhra Pradesh’s Chittoor, Kadapa, Anantapur, and Nellore districts, with a lesser presence in Tamil Nadu’s Vellore district. 

Given its limited geographic range, red sandalwood has drawn the attention of conservation bodies like the International Union for Conservation of Nature (IUCN) and the Convention on International Trade in Endangered Species (CITES). IUCN has classified it under the “Endangered Category.” Yet, its heartwood, prized for its deep red hue and unique properties, remains in high demand, especially on the global stage. The commodity’s high value has historically led to overexploitation, prompting governments to impose trade barriers. Despite these measures, illegal smuggling has surged, becoming a dominant channel for trade. Notably, significant quantities have been funneled into China, the primary export destination. 

The illegal trade in Red Sanders has recently become part of popular culture, with the Telugu movies Pushpa: The Rise and its sequel Pushpa 2: The Rule being released to rousing receptions in December 2021 and December 2024, respectively. 

Red Sandalwood Cultivation & Industry Segmentation

Rising Demand from China

China stands as a global leader in both the consumption and import of red sandalwood. This wood is prized for its applications in crafting premium furniture, medicinal uses, and perfumes. A testament to its value, the Guzheng, a national Chinese musical instrument, incorporates red sandalwood. The instrument’s ends, shaped like a rectangular wooden speaker, are crafted from this precious wood, underscoring China’s demand.​

Local artisans across various villages, notably in Hebei province’s Nanhan village, are adept at crafting artifacts and furniture from red sandalwood. With over 1,700 craftsmen, the village specializes in producing Ming-style chairs and Qing-style furniture.​ 

Thanks to the backing of the Nanhan Mahogany Furniture and Tourism Products Association and local authorities, the village’s red sandalwood trade has flourished, boosting its annual income to over USD 18.5 million by 2021. These red sandalwood products have also found a receptive audience in international markets, including the United States, United Kingdom, and Europe. 

To cater to the demand from China, the export quantity of red sandalwood from India to China has increased by close to 275% in the first ten months of 2024, compared to the entirety of 2023. 

Return on Investment on Artificially Propagated Red Sandalwood

Andhra Pradesh, Tamil Nadu, and Karnataka have granted permissions for the artificial propagation and cultivation of red sandalwood, but only in areas outside forest survey lands. Additionally, private growers can cultivate red sandalwood on their own properties.

One acre, spaced at 10 x 10 feet, can host 400 Red Sanders saplings. These saplings are available from both government and private nurseries. State-run nurseries, under the Forest Departments, distribute plants in August, offering up to 30 saplings per person at no cost. Farmers often use these saplings as border crops. For those requiring more, the government sells them at INR 30 each. Typically aged between six months to a year, these saplings stand 1 to 3 feet tall. Investors seeking faster commercial growth can turn to private nurseries, which provide slightly older saplings, over 3 feet tall, priced at INR 60 each.

To meet the crop's nutrient requirements, fertilizers and manure, such as Farmyard Manure (FYM) and NPK fertilizers, are applied over five years after planting. An acre usually gets 60 kgs of Nitrogen, 45 kgs of Potassium, and Phosphorous, along with 4-6 tons of farmyard manure. Due to the crop's resilience, additional agrochemicals like pesticides and insecticides are rarely needed. However, localized caterpillar infestations on leaves can arise between April and May, manageable with pesticides like chlorpyrifos.

Labor is essential for tasks like soil plowing, planting, weeding, pruning, and cleaning. Soil plowing and pit creation, crucial for soil preparation, occur once before planting saplings. Consistent weeding, pruning, and cleaning are vital until the plants are at least 3 years old. Red sanders, however, require minimal intercultural and maintenance efforts.

Currently, red sandalwood logs fetch prices between INR 200,000 to 350,000 per metric ton for B and C grades, and can soar to INR 750,000 per metric ton for A grade logs. In a favorable scenario, investors might see returns of 2500 - 4000% on their investment, land included.

Opening of Trade in Artificially Propagated Red Sandalwood

In 2019, the Directorate General of Foreign Trade (DGFT) permitted the trade of legally and artificially propagated red sandalwood, albeit under stringent quota regulations. Furthermore, exports of red sandalwood are overseen by the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES). 

Due to over-exploitation and illegal trading, red sandalwood faced significant challenges. While it was labeled as ‘near threatened’ in 2018, the International Union for Conservation of Nature (IUCN) elevated its status to ‘endangered’ on their Red List in 2021. 

In November 2023, after adhering to CITES guidelines, the Indian government lifted its designation from the Significant Trade list for Red Sanders, paving the way for exports of farm-grown red sanders.

Balanced Approach Needed by Planters and Investors

Relaxed regulations on red sandalwood cultivation and trade have led to a notable expansion in its planting area. If the current growth rate continues, artificially propagated red sandalwood is poised to meet overall demand within the next 15 years.

Yet, the widespread adoption of red sandalwood cultivation brings challenges for both growers and investors. If illegal harvesting and smuggling persist, pricing could become a significant hurdle during the peak supply years of 2034-2039.

To mitigate potential pricing challenges, growers are advised to implement agronomic strategies like intercropping. This approach allows them to earn from the land until their red sandalwood matures. Suggested intercropped plants, such as amla, pomegranate, and dates, enjoy strong local demand.

Moreover, adopting a staggered planting cycle for red sandalwood can be beneficial. This strategy enables growers and investors to reap financial returns for 5-10 years following the maturity of the initial plant.

Marketing and Promotion Focusing on Authenticity and Value

In addition to caution at the grower-level, planters and traders need to come together to form trade associations with the mandate to promote red sandalwood in key export markets of China and Japan.

Focus should be on promoting the authenticity of red sandalwood in the presence of substitutes such as African Camwood and its superiority for applications such as furniture.

At the government and research level, there is a need to promote research in Good Agricultural Practices (GAP) of red sandalwood, along with investigations into potential pests and diseases that could impact the crop.