Monday, August 15, 2011

Indian Sandalwood Thriving in NW Australia

For a long time now many have said that investing in tree crops will not be profitable, nor will it be sensible - you might just lose all your investment.

Work that we investigated in the early to mid 1990s seemed to indicate that there might be a place for some serious investment in tree crops in northern Australia - expensive, high quality cabinet timber trees and sandalwood were the two most promising we believed based on the research work, but were not short term money making investments.

Both appeared to have excellent mid to longer term prospects, for investment, based on continuing demand, in fact likely increasing demand, and declining production in many natural areas as well as potential for growth in the warmer north and north west of Australia. It was relatively untested, apart from some small areas of African mahogany being grown, some as ornamentals, and a few sandalwood trees around the areas. At that time sandalwood oil was around $US 400 a litre. We envisaged these trees being part of a complex rural enterprise, involving livestock as well. But it has mostly developed as a larger enterprise, and without the livestock most commonly.

Yes, African mahogany trees have been harvested and sent off for processing. Quaintly though, the ones in Darwin - and many are very large, although not always ideal for long furniture timbers, still get cut down and chipped, and are used for mulch.

[It is a bit crazy these resources are not used more effectively. A few parts get made into some local furniture, but really not much is used].

Initial trials have been successful on the mahoganies - these are really thinnings from tree plots still expected to grow for another 10 years plus.

A recent announcement has also indicated that sandalwood can also perform well. They are not large majestic trees, are somewhat complex to grow as they are a hemiparasite, a bit insignificant to look at really, and the photo shows that of a tree in Indonesia. Fairly typical looking tree.

[press release 2 August 2011 from TFS below]

The world's largest producer of Indian sandalwood says yield results from a trial harvest have proven the industry will be more than profitable in Western Australia's Ord Valley.

The harvest, from the Department of Agriculture's research station near Kununurra, found trees between 19 and 23 years of age were averaging 1.2 litres of sandalwood oil.

The oil (Santalum album) is currently fetching a record price of $2,100 per litre.

TFS executive chairman Frank Wilson, says the results are pleasing and will hopefully silence some critics.

"When we first came to the Ord, there were a lot of devil's advocates suggesting Kununurra trees wouldn't produce any oil, and they were also suggesting the only trees that would produce oil were those trees which were very small and stunted because they had been stressed," he said.

"Both of those myths have been scotched by these results and what we're showing is that Kununurra trees are producing large quantities of high quality oil."

Tropical Forestry Services (TFS) began planting Indian sandalwood in 1999, and now owns and manages around 5,000 hectares in the Kimberley region of Western Australia.

The trees produce an oil used in products such as incense, perfumes and soap.

Mr Wilson says his company is hoping to conduct its first commercial harvest in 2013, with trees that
are 14-15 years of age.

He says the company is predicting those trees will produce 0.85 litres of oil, but is confident yields and tree size will continue to improve as the industry develops.

"Ever since sandalwood was first trialled in Kununurra, there have been major improvements in silvicultural techniques, soil selection and host selection, so better yields are a natural consequence of those improvements over time."

It is interesting to note that the trees at the Department of Agriculture certainly had a hard time in their early growing years, effectively being neglected and ignored for quite a few years. It was always a big question - can trees in Kununurra produce and yield well enough to be successfully grown??

Afterall, trees are cut down / removed entirely at harvest, and that trees can can take 20 - 30 years or more to grow to maturity. It is a long time to wait and see what happens!!!

Some core samples a few years ago from the Department trees seemed to partially indicate positive yields, but it is really encouraging to see how sucessful these sandalwood yields are.

No comments: