How to Grow Sandalwood Trees

Sandalwood (Santalum spp.) is a semi-parasitic tree, which means its roots tap into nearby host plants to draw water and nutrients. Successful sandalwood cultivation depends on getting that sandalwood–host relationship right from the start.

Step-by-Step: Establishing a Sandalwood Plantation

1. Seed Selection and Germination – Collect or purchase high-quality, viable seed from well-formed, oil-rich parent trees. Gently scarify and soak seeds in clean water for 24–48 hours to improve germination. Sow in a well-drained nursery mix in trays or polybags under partial shade.
2. Host Plant Selection – Sandalwood needs short- and long-term hosts. Common hosts include nitrogen-fixing species such as Acacia, Cassia, Pongamia, and some fruit trees. Mix shallow- and deep-rooted species so sandalwood can access moisture and nutrients at different soil depths.
3. Soil Preparation – The best soils are well-drained sandy loams or lateritic soils with a pH of approximately 6.0–7.5. Avoid heavy clays or poorly drained sites. Light ripping or subsoiling, combined with organic matter, helps roots penetrate deeply and anchor the tree.
4. Planting and Spacing – A typical block uses 3 m × 3 m spacing (about 1,100 trees/ha) with interplanted hosts. On smaller holdings, you can integrate sandalwood into a mixed agroforestry system alongside teak, mahogany, or rosewood. Geometric and spiral patterns (explained below) can boost both density and host contact.
5. Watering and Fertilization – Provide reliable irrigation in the first 18–24 months, then gradually harden trees by reducing watering as roots deepen. Apply well-decomposed compost, mulches, and a balanced NPK when early growth is slow. Over-fertilizing the host while starving the sandalwood can reduce heartwood development, so keep nutrition balanced.
6. Pest and Disease Management – Monitor for stem borers, leaf miners, scale insects, and spike disease. Avoid waterlogging, which weakens roots and invites pathogens. Wherever possible, use integrated pest management (IPM) and natural controls (neem-based sprays, beneficial insects, and good sanitation) rather than heavy chemical use.
7. Pruning and Plantation Maintenance – Lightly prune host plants so they do not overshadow young sandalwood. Remove dead, diseased, or crossing branches and keep access lanes open for inspections, thinning, and eventual harvesting.

Well-planned sandalwood plantations often combine short-term cash crops, such as annuals or citrus trees, in the early years to generate cash flow while the sandalwood matures underground value in its heartwood.

Where Does Sandalwood Grow Best?

Sandalwood thrives in tropical and subtropical climates with moderate rainfall (about 600–1600 mm per year) and warm temperatures between 20–35 °C. A distinct dry season is often beneficial for promoting heartwood and oil formation.

Best Regions for Sandalwood Cultivation

• India – States such as Karnataka, Tamil Nadu, Kerala, and Andhra Pradesh have a long history of growing Santalum album and Pterocarpus santalinus (red sandalwood). Regulations are strict, so landowners must understand current rules before planting.
• Australia – Western Australia and the Northern Territory host large commercial plantations of Santalum spicatum and Santalum album. These are typically modern, export-oriented sandalwood plantations with clear legal frameworks.
• Sri Lanka and Indonesia – Share similar climates to southern India and remain important origins for Indian sandalwood (Santalum album).
• Pacific Islands – Places like Fiji, Tonga, and Hawaii cultivate sandalwood as part of mixed agroforestry systems and smallholder tree plantings.
• Africa and Latin America – Pilot plantations in parts of Kenya, East Africa, and Peru are testing sandalwood’s performance as a high-value export tree.

Wherever you plant, long-term success depends on matching species and provenance to site conditions, and on having a clear route to legal, certified markets.

Varieties of Sandalwood: Red vs. White

“Sandalwood” refers to several different species, each with its own chemistry, fragrance profile, and market niche. Two of the best known are white sandalwood and red sandalwood.

White Sandalwood (Santalum album)

• The most prized and aromatic species, native to India and now grown in Sri Lanka, parts of Southeast Asia, and Australia.
• Heartwood and oil are used in high-end perfumery, incense, Ayurveda, and religious rituals. Oil is rich in alpha- and beta-santalol, which drive its fragrance and price.
• Produces high-quality essential oil with strong export demand and well-established global buyers.

Red Sandalwood (Pterocarpus santalinus)

• Native to India, especially the Eastern Ghats of Andhra Pradesh, and often called “red sanders.”
• Valued for its deep red timber used in traditional medicine, natural dyes, and high-end furniture and carvings.
• Unlike white sandalwood, it does not produce the same essential oil but remains highly valuable in the medicinal, dye, and specialty wood markets.

Other Santalum species (such as S. spicatum in Australia and island sandalwoods in the Pacific) also have strong potential. Blending species within a diversified hardwood portfolio can spread risk across markets and climates.

The Market for Sandalwood: Controlled and Protected

Because of decades of overharvesting and illegal logging, many governments tightly regulate the harvest and trade of sandalwood. Understanding this regulatory landscape is essential before you plant or commit capital to a sandalwood project.

Key Market Regulations and Trade Settings

• India – Historically, the state held strong control over sandalwood trees and heartwood. Many states now allow private cultivation under strict permitting and reporting, and export rules can change, so growers must stay current.
• Australia – Operates an open-market system for plantation-grown sandalwood with clear tenure and export channels. Large managed plantations supply wood and oil to international buyers.
• CITES Protection – Several sandalwood species are listed under the Convention on International Trade in Endangered Species. This means exports often require CITES permits and documented legal origin.

These controls are designed to protect wild stands and reward growers who invest in legally verifiable plantations. When combined with robust traceability and certification, plantation-grown sandalwood can command strong prices and long-term demand.

Why Is Sandalwood So Valuable?

Sandalwood’s premium value comes from a rare combination of slow growth, limited legal supply, and intense demand across multiple high-margin industries. Both heartwood and essential oil are used in:

Core Uses and Value Drivers

• Luxury Perfumes and Cosmetics – Sandalwood oil provides a deep, creamy base note that fixes other fragrances and is difficult to replace with synthetics.
• Traditional Medicine – Widely used in Ayurveda and Chinese medicine for anti-inflammatory, cooling, and calming properties.
• Spiritual and Religious Ceremonies – Essential oil, powders, and incense play an important role in rituals across India and much of Asia.
• Wood Carvings and Handicrafts – Fine heartwood is turned into sculptures, prayer beads, and high-end decorative objects that retain fragrance for decades.

As wild sources shrink and regulations tighten, well-managed plantations that can prove their legality and sustainability are positioned to capture a premium share of the sandalwood value chain.

Cost and Pricing of Sandalwood

Prices for sandalwood products vary with species, age, heartwood diameter, oil content, and certification. The figures below are illustrative ranges used by many growers and investors to benchmark potential returns.

Indicative Market Prices

• White Sandalwood (Santalum album) Heartwood – Often ranges from roughly $80 to $150 per kg for plantation wood, with exceptionally high-quality logs commanding more.
• Sandalwood Essential Oil – Depending on species, quality, and certification, wholesale prices can range from approximately $3,000 to $6,000 per litre.
• Red Sandalwood (Pterocarpus santalinus) – Typically valued at around $25 to $50 per kg for medicinal and specialty wood markets.

For a more detailed view of potential returns, you can use the Tree Value Calculator to estimate the projected value of mature sandalwood trees under different pricing and yield scenarios.

Harvesting Sandalwood Trees

Sandalwood is typically ready for harvest between 15 and 30 years, depending on species, climate, planting density, and management. The goal is to maximize heartwood volume and oil content, rather than just total biomass.

Harvesting Process

• Tree Uprooting – Unlike many other timber species, sandalwood is often uprooted entirely to recover heartwood from roots as well as stems.
• Heartwood Extraction – Skilled workers separate dark, aromatic heartwood from lighter sapwood and offcuts.
• Oil Distillation – Heartwood chips and powder are processed via steam distillation to extract essential oil, a major value component of Santalum album.
• Grading and Processing – Logs and chips are graded by age, density, aroma, and oil content before entering carving, incense, or distillation markets.

Because harvesting techniques directly affect saleable yield and oil recovery, many growers partner with specialist processors or distillers to capture maximum value from each tree.

The Benefits of Geometric Planting: Faster Growth and Higher ROI

Traditional grid layouts work, but geometric and spiral planting patterns can help optimize light capture, root interaction, and host distribution—especially for semi-parasitic trees like sandalwood. These layouts borrow from the same logic used in high-efficiency rosewood and teak plantations.

Advantages of Growing Sandalwood Trees in Spirals

• 1. Better Water Utilization – Circular and triangular spacing patterns can reduce waste, concentrate irrigation, and improve root efficiency compared with rigid square grids.
• 2. Accelerated Growth – Thoughtful placement of hosts around each sandalwood tree improves root contact and nutrient flow, often reducing practical maturation time by several years.
• 3. Higher Yields per Hectare – Spiral and geometric layouts allow more sandalwood–host units per hectare without creating destructive competition for light or moisture.
• 4. Lower Maintenance Costs – Healthier trees with good spacing typically suffer fewer pest and disease problems, reducing intervention and replanting costs over the life of the plantation.
• 5. Quicker Return on Investment – Shaving even 3–5 years off a 25-year rotation can significantly improve the internal rate of return (IRR) on a sandalwood project.

For larger projects, geometric layouts also make it easier to plan harvest blocks, access tracks, and irrigation lines, improving both operational efficiency and investor confidence.

Calculate the Value of a Sandalwood Tree

Use our Tree Value Calculator to run sample scenarios for sandalwood plantations by age, spacing, and heartwood yield. This is a useful starting point for landowners and investors modelling long-term returns.

Potential Investment in a Sandalwood Plantation

Sandalwood cultivation is a long-term, patient-capital investment that can offer substantial returns when managed correctly. High market demand, limited supply, and a growing interest in sustainable forestry and carbon assets make sandalwood an attractive option for investors looking beyond traditional assets.

By combining best practices—careful host selection, good site preparation, geometric planting, and professional harvesting—with transparent governance and traceability, growers can enhance growth rates, reduce effective harvest age, and maximize net present value on each hectare.

If you’re considering planting sandalwood, the foundations of success are:

• Clear understanding of regulatory requirements in your region;
• Access to trusted markets for wood, chips, and oil;
• Realistic financial modelling over a 15–30 year timeframe; and
• Partnerships with experienced foresters and distillers.

With the right strategy, a sandalwood plantation can become one of the most valuable tree assets on your land within just two decades.

Contact Us About Investing in Our Sandalwood Plantation in Northern Australia

To explore partnership, offtake, or investment opportunities in a commercial sandalwood plantation in Northern Australia, reach out to the Tree Plantation team. We can share site details, species mix, and indicative financial models under non-disclosure.

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