Sandalwood fetches record prices

Karnataka forest department's sandalwood auction at Mysore fetched an all-time high of Rs 38.51 lakh a tonne for heartwood (old mature tree's central portion) as against the normal price of Rs 30-32 lakh a tonne.

According to A K Verma, Karnataka's principal chief conservator of forest, the auction held recently saw mixedwood fetching Rs 14.76 lakh a tonne and whitechips Rs 43,000 a tonne.

Sandalwood is regulated by the government and is sold through public auction. Wood is received from different forest divisions grouped in three categories such as sandalwood grown on government land, from private lands and wood involved in offenses (smuggling).

Attributing reasons for high rates, Verma said that there was a demand-supply imbalance for this scarce commodity. The global demand for sandalwood is estimated to be 5,000 to 6,000 tonnes. Of this demand, more than two-thirds is met by Indian sandalwood.

The production of sandalwood is not able to match demand.

The country's production has fallen from a high of 4,000 tonnes per annum in the 1960s to 2,000 tonnes during 1990s to 1,000 tonnes now. This gap in demand and supply has led to the steep increase in prices and massive smuggling, he added.

Through public auctions in 2006-07, the Karnataka forest department was able to sell 97 tonnes valued at over Rs 11 crore. Auctions at Mysore depot fetched Rs 7.52 crore, Shimoga Rs 72.36 lakh and Dharwad Rs 34.30 crore. In 2005-06, the department was able to sell around 90 tonnes.

The retail trade in sandalwood is open to temples, religious institutions, individuals and small consumers.

However, due to pressure from sandalwood artisans, the Karnataka State Handicraft Development Corporation (KSHDC) continues to buy and sell through its retail window at 50 per cent of the retail sale price fixed every year based on previous auctions.

Following are retail sale rates per tonne for sandalwood in Karantaka: Heartwood - Ghatbadla Rs 27.10 lakh, Bagardad Rs 27.30 lakh, Root-1 Rs 25 lakh, Root-II Rs 25.80 lakh, Root III Rs 19.80 lakh, , Jajpokal-I Rs 28.10 lakh, Jajpokal-II Rs 25.60 lakh, Ainbagar Rs 24.50 lakh, Chilta Rs 22.20 lakh, Ain Chilta Rs 18.50 lakh, Hathri Chilta Rs 13.10 lakh. Mixed wood - Milva Chilta Rs 13 lakh, Basola Bukni Rs 6 lakh, Sawdust 7.5 lakh. Softwood - Bilichakke Rs 34,000.