Red sanders, a precious wood found in Andhra Pradesh's Seshachalam forests, helped the state earn over Rs.1,000 crore from global auction last year.
The government had in December 2014 conducted global e-auction of 4,160 tonnes of red sanders logs seized from smugglers in recent years.
The forest department put for auction three grades of red sanders. The average rate per tonne during the sale was Rs.27.41 lakh.
The Director General of Foreign Trade permitted the state to sell and export 8,854 tonnes. But the government decided to auction only 4,160 tonnes in the first phase.
The remaining red sanders are likely to be auctioned this year.
Forest officials said there was a good response to the auction. They also conducted pre-bid meetings and roadshows in China and Japan where the rare wood enjoys huge demand.
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Over 400 prospective buyers, including 140 from China, Japan and Singapore, visited the red sanders depots.
The state plans to use 30 percent of the proceeds from the sales to protect the natural red sander forest. The remaining money may be used to finance the government's scheme to waive off farm loans.
Classified as endangered in the International Union for Conservation of Nature's red list, red sanders fetch Rs.25 lakh a tonne in the international market. It is mainly used in aphrodisiac drugs and for making musical instruments and furniture.
Red sanders grow mainly in Seshachalam hill ranges spread across Kadapa, Chittoor and Kurnool districts in the Rayalaseema region and parts of Nellore district. The area under red sanders is estimated to be 4.67 lakh hectares.
The forests have witnessed clashes between red sander smugglers and police.
According to police, 20 smugglers of red sanders were gunned down on Tuesday in Chittoor district. In 2013 smugglers killed two forest officers and injured three others.