Sandalwood Oil Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

Sandalwood oil is the most important product in the world market. It is expected that by 2024 the market will be worth $ 113 million, and will rise to $ 200 million by 2032, at a compound annual growth rate (CAGR) of 6.99%. This upward trend is due to the growing demand for sandalwood oil, resulting from its wide range of uses in perfumes, cosmetics and aromatherapy. Moreover, the demand for natural products is increasing. Sandalwood oil is known for its medicinal properties and its fragrance. There is a growing awareness of the benefits of essential oils, and the use of sandalwood oil is growing in personal care products. It is also hoped that the trend towards more sustainable practices in the exploitation of sandalwood will help to increase the market. The major players, such as East Indian Sandalwood Company and Santanol Group, are actively investing in the implementation of these practices, and are collaborating with other companies in order to ensure the supply of high-quality oil. It is not only a question of supporting the market, but also of complying with the growing demand for sustainable and eco-friendly products.

Regional Market Size

Regional Deep Dive

Sandalwood oil is a twig of the sandalwood tree, which is cultivated in the Indian Himalayas. It is used as a scent in perfumes, and is used in the manufacture of soap, and also in perfumes and cosmetics. In North America the market is characterized by a growing demand for natural and organic products. There is an increasing demand for sustainable and ethically sourced ingredients. In Europe, the market is characterized by stricter regulations for cosmetics and a strong preference for natural scents. In Asia-Pacific, especially in India and Australia, the production of sandalwood is very high, and the traditional uses and the export market are very important. In the Middle East and Africa, the use of sandalwood in traditional and modern practices is increasing, and in Latin America, the awareness of aromatherapy and natural products is increasing.

Europe

• The European Union's REACH regulation is pushing manufacturers to ensure that sandalwood oil is sourced sustainably, leading to partnerships with organizations like the Forest Stewardship Council (FSC) to promote responsible sourcing.
• Innovations in extraction techniques, such as supercritical CO2 extraction, are being adopted by companies like Givaudan, enhancing the quality and yield of sandalwood oil.

Asia Pacific

• India remains a key player in sandalwood oil production, with government initiatives aimed at promoting sustainable cultivation practices to combat illegal logging and overharvesting.
• Australia is emerging as a significant producer, with companies like Santalis Pharmaceuticals investing in large-scale sandalwood plantations to meet growing global demand.

Latin America

• The growing interest in aromatherapy and natural wellness products is leading to increased exploration of sandalwood oil applications in countries like Brazil and Argentina.
• Local startups are beginning to emerge, focusing on sustainable sourcing and production of sandalwood oil, which could reshape the market landscape in the region.

North America

• The rise of clean beauty trends has led to increased demand for sandalwood oil in cosmetic formulations, with companies like Aveda and L'Occitane incorporating it into their products.
• Regulatory changes, such as the California Consumer Privacy Act (CCPA), are prompting companies to be more transparent about sourcing and sustainability practices, influencing consumer trust and purchasing decisions.

Middle East And Africa

• The Middle East has a long-standing cultural affinity for sandalwood oil, with traditional uses in perfumery and incense driving demand, particularly in countries like the UAE and Saudi Arabia.
• Recent collaborations between local producers and international brands are enhancing the quality and market reach of sandalwood oil, with companies like Ajmal Perfumes leading the way.

Did You Know?

“Sandalwood oil has been used for over 4,000 years in traditional medicine and religious rituals, making it one of the oldest essential oils in continuous use.” — International Journal of Aromatherapy

Segmental Market Size

The market for sandalwood oil is currently experiencing steady growth, a result of the increasing demand for natural and organic products. In addition, the popularity of aromatherapy and the trend towards sustainable exploitation are driving this market. In North America and Europe, regulatory requirements are encouraging the use of natural products in the cosmetics and toiletries industries, thus boosting demand for sandalwood oil. The industry is at a mature stage at present, with the East Indian Sandalwood Company and the Santanol Group leading the way in sustainable exploitation. Sandalwood oil is used primarily in perfumes, cosmetics and traditional medicine. Its versatility makes it suitable for many applications. The market is currently undergoing a period of transition as consumers become more aware of the origins of the products they buy. The industry is being reshaped by new methods of extraction such as steam distillation and supercritical fluid extraction. These methods produce high-quality oil with minimal impact on the environment.

Future Outlook

From 2024 to 2032, the sandalwood oil market will grow from $ 109 million to $ 198 million, a strong compound annual growth rate of 6.8 %. This is due to the growing demand for natural and organic products, especially in the cosmetics and aromatherapy sectors. The penetration of sandalwood oil into the market is expected to increase as consumers become increasingly aware of the health benefits of sandalwood oil, including its anti-inflammatory and antiseptic properties. This will lead to an increase in the use of sandalwood oil in the manufacture of health and beauty products. Also driving the market are technological developments and government regulations. Advancing extraction techniques, such as supercritical extraction, are increasing the quality and availability of sandalwood oil. Meanwhile, the implementation of sustainable and ethical sourcing policies is driving the market towards the use of sustainable and organic products, which is a strong incentive for the purchase of sandalwood oil. In addition, the growing use of sandalwood in aromatherapy and the growing interest in alternative medicine will stimulate the market. Sandalwood oil will thus become a staple of both modern and traditional medicine.