As per the report published by Kings Research, the Global Sandalwood Market was valued at USD 358.3 million in 2023 and is projected to reach USD 583.1 million by 2031, growing at a CAGR of 6.36% from 2024 to 2031.
The sandalwood market is a niche segment within the global timber and fragrance industries. The market is characterized by its high value due to the unique properties of sandalwood, particularly its aromatic qualities. The market is influenced by factors such as supply chain dynamics, environmental regulations, and consumer preferences. Key players in this market include producers, processors, traders, and end-users such as perfume manufacturers and pharmaceutical companies. Prices in the industry fluctuate based on supply-demand dynamics, since, India, Australia, and Indonesia are among the major producers. Sustainable sourcing practices and technological advancements in cultivation and extraction methods are shaping the future of the sandalwood market.
Key Insights
- Based on type, the Australian sandalwood segment is anticipated to grow at the fastest pace at a CAGR of 7.16% in the forecast duration (2024-2031)
- Based on application, the personal care segment is estimated to hold 38.87% of the market value in 2031
- On the basis of region, Asia-Pacific led the market in 2023 with a valuation of USD 134.4 million
Santanol Joins the Union for Ethical BioTrade (UEBT) to Highlight its Dedication to Ethical Sourcing and Reduction in Biodiversity Impact
June 2023: Santanol, a producer and distributor of pure sandalwood oil, recently joined the Union for Ethical BioTrade (UEBT), highlighting its dedication to ethical ingredient sourcing and positive impacts on biodiversity and local communities. Membership in UEBT involves complying with entry indicators and committing to a 3-year plan to enhance ethical sourcing practices, aligning with Santanol's mission to regenerate nature and promote a better future.
Integration of Sustainability in Sandalwood Cultivation and Supply Chain Resulting in Market Transformation
Sandalwood cultivation is experiencing a shift towards more sustainable practices. This includes initiatives including reforestation programs, organic farming techniques, and responsible harvesting methods. Companies are investing in research and development to improve yield without compromising on environmental conservation. Manufacturer are partnering with sustainable investors, technology providers, and certification bodies to collaborate and innovate within the sandalwood market, ensuring long-term viability while meeting consumer demand for ethically sourced products.
Increasing Demand for Natural Fragrances Globally to Provide Opportunity for Growth
The rising trend towards natural and organic products has created a significant opportunity in the sandalwood market, particularly in the fragrance segment. Consumers are increasingly preferring natural fragrances derived from authentic sources such as sandalwood, leading to a surge in demand from perfume manufacturers and aromatherapy industries. This shift aligns with the growing awareness of eco-friendly and health-conscious choices, driving market players to explore new formulations and product lines centered around natural sandalwood extracts.
Expanding Applications in the Pharmaceutical Industry to Result in Market Expansion
Sandalwood's medicinal properties are gaining attention in the pharmaceutical industry, presenting a promising opportunity for market expansion. Research into sandalwood's therapeutic benefits, such as the anti-inflammatory and antimicrobial properties exhibited by sandalwood extracts, is fueling interest in incorporating sandalwood extracts into pharmaceutical formulations. This diversification of applications beyond traditional uses such as perfumery, opens doors for collaborations between sandalwood producers, pharmaceutical companies, and research institutions to develop innovative healthcare solutions.
North America To Be The Fastest-Growing Region, Exhibiting 7.40% CAGR Between 2024 and 2031
Based on regional analysis, the global sandalwood market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America. North America’s growth can be attributed to several factors including the increasing consumer awareness and demand for natural products, such as fragrances and skincare items, are driving the demand for sandalwood extracts in the region. Moreover, technological advancements in cultivation and extraction methods are enhancing efficiency and quality, making sandalwood products more accessible and appealing to North American consumers. Additionally, strategic partnerships and collaborations within the industry are fostering innovation and market expansion, further fueling the region's growth.
Companies Focus on Launching New Products to Expand Their Market Reach
The global sandalwood market reveals a fragmented landscape featuring prominent companies including A.G. Organica, Ahimsa Oils, Essentially Australia, Haihang Industry Co., Ltd., Mercer International Inc., Puja Perfumery, Quintis (Australia) Pty Ltd., The Amber Trail, Veda Oils, INDIA AROMA OILS AND COMPANY, and others. Companies employ a variety of strategic measures such as acquisitions, mergers, partnerships, product introductions, and collaborations to expand their global business footprint and enhance their competitive position.