Updated: Mar 30
The lack of cultivation of sandalwood trees due to smuggling, poaching and government regulation has increased the prices of sandalwood oil exponentially.
While most of the market is domestic, some perfumers also export to countries like Spain, China and France. The Middle East remains the biggest export market because people don’t use alcohol-based perfumes there.
But the lack of cultivation of sandalwood trees due to smuggling, poaching and government regulation has increased the prices of sandalwood oil exponentially.
“Currently sandalwood oil costs Rs 1 lakh a kg, and we’ve to pay 18 per cent GST on it, taking the cost to Rs 1,18,000,” said Trivedi. According to him, sandalwood oil used to cost Rs 40,000/kg in 2011-2012, which means it has risen 195 per cent over a decade.
The reason behind the high prices is the lack of cultivation of sandalwood, which reportedly declined in India over four decades to 400 tons a year from 4,000 tons a year.
The Covid-19 pandemic and the subsequent lockdown also added to the stress faced by everyone in the chain.
"Farmers fetching Rs 42-45 a kg for roses last year. This year, it’s only Rs 32-35,”
Agents who supply flowers and roots to the distilleries in the city from nearby farms, said their business were hurt during the lockdown and only 10-20 per cent of the distilleries were functioning, but business has now restored.
The business recovery post Covid has only been 50 per cent of what it was before the lockdown, and exports are still just as badly hit but slowly recovering.