Sandalwood Market Market Size, Growth

SANDALWOOD MARKET OVERVIEW

The global Sandalwood Market size was valued approximately USD 385.22 Million in 2025 and will touch USD 814.13 Million by 2034, growing at a compound annual growth rate (CAGR) of 8.67% from 2025 to 2034.

Sandalwood is obtained from trees of the genus Santalum. It is of great value for its aromatic properties, medicinal benefits, and cultural significance. Renowned for its rich, warm, and long-lasting scent, sandalwood has been used for centuries in perfumery, religious rituals, and traditional medicine. The essential oil extracted from sandalwood is highly valued in cosmetics, aromatherapy, and incense for its soothing and therapeutic effects. Moreover, sandalwood has a spiritual connection since it signifies purity and sanctity among so many varied cultural perspectives. The combination of high demand with extremely slow growth rates places a premium on responsible sourcing and planting strategies within the modern global marketplace.

IMPACT OF KEY GLOBAL EVENTS

Navigating Global Shifts in the Sandalwood Market

Geopolitical happenings, such as those that relate to trade or access to resources, have a huge impact on the sandalwood market. For example, regional wars or trade embargoes in leading countries where sandalwood is produced affect supply chains and may lead to fluctuating prices and scarcity. Artifical Intelligence: The increase in artificial intelligence is also being felt within the industry. AI-driven toolsets optimize value chains while improving the tracking of sustainable harvesting. However, the retreat to globalization brings challenges in that stricter trade regulations and localized economies may limit international access to sandalwood products. These dynamics put pressure on stakeholders to ensure that sustainable practices are prioritized and innovated to maintain market stability in light of global uncertainties.

LATEST TREND

Changing Practices Due to the Rise of Sustainable and Ethically Sourced Sandalwood

One of the major trends that is going to prevail is the growth of sustainable and eco-friendly sandalwood. There is an increasing demand for products from renewable sources that are produced by methods of friendly harvesting and processing. This has compelled producers into sustainable cultivation techniques, strict transparency in the supply chain, and ethical sourcing. The premium quality and eco-friendliness of the product is becoming a key factor in purchase decisions, thus redefining the global sandalwood market.

SANDALWOOD MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Indian Sandalwood, Australian Sandalwood, Others

Indian Sandalwood：Indian Sandalwood, from the Santalum album tree, is valued for its perfume and high oil content. It's used in perfumes, cosmetics, and traditional medicines. High demand and limited availability, with strict regulations, have driven up prices and prompted sustainable cultivation.
Australian Sandalwood：Australian Sandalwood, from Santalum spicatum, is versatile and affordable, used in oils, incense, and skincare. Its market has grown due to sustainable harvesting and global demand. Meeting the need for eco-friendly, ethical sandalwood makes it a competitive alternative to Indian Sandalwood.
Others：This category includes sandalwood from Southeast Asia and Africa, used locally and industrially. Quality variability and branding limit recognition. Proper marketing and sustainability could boost their global market share.

By Application

Based on application, the global market can be categorized into Personal Care, Aromatherapy, Pharmaceuticals, Sculpture, Furniture, Others

Personal Care：Sandalwood is valued in personal care products for its soothing, luxurious fragrance. Its market grows as consumers prefer natural, premium ingredients. High demand for sustainable, cruelty-free formulas drives innovation.
Aromatherapy：In aromatherapy, sandalwood oil has earned an excellent reputation due to its calming and relieving properties from stress. As a result of the increasing trend towards wellness and alternative healing, the demand for sandalwood in this particular sector is rising. Being used in diffusers, candles, and massage oils places it in a key position within the booming wellness market.
Pharmaceuticals：Sandalwood is used in pharmaceuticals for anti-inflammatory, antimicrobial, and therapeutic properties. Applications range from skin treatments to traditional medicine systems such as Ayurveda. The demand is stable, though regulatory restrictions and high costs are disadvantages. However, continuous research into the medical benefits of sandalwood is likely to create opportunities in this segment in the near future.
Sculpture：Sandalwood has always been used in the carving of religious and artistic sculpture, mainly in Asia. This application is highly valued and very niche; demand is maintained through collectors, cultural tradition, and artisanal craftsmanship. Increasingly scarce availability of high-quality wood is naturally limiting growth in this market segment.
Furniture：Because sandalwood is extremely hard and has this perfumy fragrance, sometimes it is applied to luxury furniture. This constitutes a niche, yet exclusive and narrow segment of the total market that desires exclusivity with aroma. The environmental impact concerns and the call for sustainable replacements may also inhibit the growth rate in this segment.
Others：Other uses include miscellaneous applications such as incense sticks and traditional rituals where sandalwood holds a cultural and spiritual significance. These applications remain regionally strong, particularly in Asia, and contribute to consistent demand, though often at a smaller scale compared to other segments.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

Increase in demand with the rising trend of natural and organic personal care products

A fast consumer preference for natural and organic personal care products significantly strengthens the demand for sandalwood. It finds its place among the high-end skincare, perfumes, and cosmetic industries due to its distinctive aromatic and therapeutic properties. Growing awareness about sustainable and cruelty-free beauty further accelerates the growth in the sandalwood market, especially for eco-conscious consumers.

Market growth driven by the rise in wellness and aromatherapy practices

It is for this reason that sandalwood has gained immense popularity in the wellness industry due to its calming and stress-relieving properties. Its application in aromatherapy products, such as essential oils, candles, and diffusers, perfectly coincides with the growing demand for holistic healing and mental well-being. The integration of sandalwood into luxury wellness products opens an avenue for significant market expansion.

Restraining Factor

High costs and limited availability of premium-quality sandalwood

The high price of sandalwood is the main constraining factor due to its scarce supply and the long time it takes in cultivation. Overexploitation and regulatory control over its harvest in major producing countries like India have further rendered it scarce and, therefore, a luxury commodity. This fact greatly reduces its affordability for middle-tier manufacturers and consumers, hence negatively impacting market growth.

Opportunity

Expanding applications in pharmaceuticals and health-conscious markets

The pharmaceutical and health-conscious benefits of sandalwood-in its antimicrobial, anti-inflammatory, and therapeutic values-create a niche of growing opportunity. Ongoing research and development into its medicinal properties are likely to unlock new applications, from skincare treatments to wellness supplements. Producers who emphasize these benefits in their marketing strategy can tap into emerging segments and expand their consumer base.

Challenge

Competition from synthetic substitutes and alternative materials

The major challenges for the market players are the increasing availability of synthetic sandalwood substitutes and other aromatic ingredients. These substitutes are much cheaper for manufacturers, especially in the mass-market segments where prices are already low. This will always raise a marketing challenge in convincing consumers that natural sandalwood is superior in quality, authenticity, and benefits compared to synthetics.

SANDALWOOD MARKET REGIONAL INSIGHTS

North America

The North American sandalwood market is growing due to demand for natural personal care products. Consumers recognize sandalwood's benefits in skincare, perfumes, and wellness. Wellness and aromatherapy drive oil and candle sales. Despite preferences for sustainable products, limited availability and high costs challenge manufacturers, amid supply chain disruptions.

Europe

In Europe, sandalwood demand grows with interest in luxury fragrances and natural beauty products. Consumers prefer premium, sustainable, ethically sourced items, boosting sandalwood's popularity in cosmetics, perfumes, and aromatherapy. Wellness and holistic health practices further increase its use in oils. Europe's regulatory framework keeps the market competitive, but high raw costs challenge mass-market manufacturers.

Asia

Asia, sandalwood's birthplace, is the world's largest producer and consumer. India and Indonesia export heavily, meeting high demand in traditional medicine, incense, and culture. Emerging markets like China and Southeast Asia boost personal care sales. Overharvesting and stricter regulations raise prices, challenging buyers. Asia's growing wellness and aromatherapy industries offer market growth opportunities.

KEY INDUSTRY PLAYERS

Intense Competition and Innovation Driving the Sandalwood Industry

Competition within the industry is very high, with a number of players fighting aggressively to corner a sizeable market share in the personal care, aromatherapy, and fragrance sectors. Key competitors are increasingly trying to source high-quality, sustainably harvested sandalwood in response to growing consumer demand for eco-friendly and ethical products. Innovation, too, is on the rise, with new extraction techniques and blending of sandalwood with other natural ingredients to provide differentiated product offerings. However, the limited supply of sandalwood due to conservation efforts and regulatory restrictions further raises pressure on participants to secure a reliable and ethical supply chain. This has driven firms to develop close relations with suppliers and the offering of high-end differentiated products as their distinctive competitive features.

List Of Top Sandalwood Market Companies

Quintis
FPC
WA Sandalwood Plantations
Australian Sandalwood
Santanol Group

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The demand for sandalwood has surged due to the increasing demand from the fragrance, medicine, and therapeutic application industries. Indian sandalwood is gaining a wide audience because of its rich fragrance and high price value, whereas Australian sandalwood is gaining momentum due to increasing interest in sustainability. Increasing demand for natural ingredients in personal care, aromatherapy, and pharmaceutical segments is also one of the major reasons for the surge. Also, with growing consciousness regarding the conservation of nature, there has been a move toward more ecologically friendly practices in how the produce is cultivated or sourced.

The outlook for Sandalwood is promising, whereby its demand for various high-profile consumer products will, in turn keep the pace of growth of Sandalwood demand upbeat. Supply, however, may be constrained due to the very nature of the growth characteristics of these trees and the rarity of quality raw material. There is an increasing shift towards the development of plantations in new areas and the methods for sustainable improvements. Innovation in manufacturing and product creation, along with consistent consumer interest in natural and greener alternatives across the board, will, in all probabilities, continue to help the marketplace.