Australia exports sandalwood oil to Karnataka as state’s production, quality decline: Report
Bengaluru: In a reversal of roles, Australia, which once imported sandalwood seeds from Karnataka, is now exporting sandalwood oil to the state. This shift comes amid a decline in both the quality and yield of farm-grown sandalwood in Karnataka, resulting in increased reliance on imports to meet domestic demand.
Private companies and Karnataka Soaps and Detergents Limited (KSDL) are increasingly diversifying their product lines due to the shortage of raw material, as reported by The New Indian Express on Thursday. Many are shifting focus to non-sandal-based items such as jasmine, rose, lavender, and aloe vera.
A KSDL official said that there is currently a 60–70% shortage of both sandalwood and its essential oil, severely impacting domestic production. To compensate for the shortfall, they are importing approximately 5,000 kg of sandalwood oil from Australia annually which continues to rise each year.
“Australia has become one of the largest suppliers of oil. Since Karnataka’s sandalwood is of supreme quality, Australia took the seeds from Karnataka in the 1990s and harvested them in a secure environment. Good quality of oil was extracted and Australia is gradually becoming a leading exporter of sandalwood oil,” TNIE quoted the KSDL official as saying.
The official added that, in addition to sourcing farm-grown sandalwood within the state, KSDL is also procuring wood from other states, including Tamil Nadu, Kerala, Gujarat, and Madhya Pradesh, to meet the demand.
The decline in both the quantity and quality of sandalwood was highlighted in the Sandalwood Development Committee’s report released by the Central Vista Oversight Committee. The report, cited by TNIE, also identified Australia as the largest sandalwood market, holding approximately 69 percent of the market share, followed by India with a 20 percent share.
Officials at the Institute of Wood Science and Technology mentioned that, although sandalwood is a hardy species requiring a stressful environment to thrive, factors such as declining soil quality, reduced land fertility, and inadequate protection measures are contributing to a deterioration in its quality.
The Karnataka Forest (Amendment) Bill, 2001, permits the cultivation of sandalwood on private lands. This policy change has reportedly encouraged private individuals to engage in the cultivation and protection of sandalwood trees.
KSDL Managing Director Prashanth PK stated that to boost wood procurement, they have signed Memorandums of Understanding (MoUs) with 735 farmers, resulting in sandalwood cultivation on over 4,000 acres. “But a lot more needs to be done as demand is rising. Due to shortage, KSDL is diversifying into other items,” TNIE quoted him as saying.
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Evading core issue: Siddaramaiah slams Centre on sugarcane FRP in letter to Pralhad Joshi
Bengaluru: Karnataka Chief Minister Siddaramaiah launched a sharp attack on the Central Government Saturday, accusing it of "evading the core issue" of the widening gap between cultivation costs and the price realisation for sugarcane, which he stated has pushed lakhs of farmers into distress.
In a detailed, three-page letter to Union Minister Pralhad Joshi, Siddaramaiah dismantled the Centre's claims on the Fair and Remunerative Price (FRP), ethanol blending, and financial support to the state.
The Chief Minister's letter was a direct rebuttal to one he had received from Joshi regarding the "plight of sugarcane farmers in Karnataka."
"Farcical" FRP claims
Siddaramaiah challenged the Centre's announced FRP of ₹355 per quintal at 10.25% recovery, calling the government's claim of a 105.2% margin over production cost "unfortunately, a farce."
"Every farmer in Karnataka knows that since 2014, the cost of fertilizers, labour, transportation, and other inputs have more than doubled," Siddaramaiah wrote. He contrasted this with the FRP, which he stated has increased at a compound annual growth rate (CAGR) of just 4.47% since 2014, rising from ₹210 to ₹355.
He also pointed out that the FRP was not increased for two consecutive years during the NDA regime, causing an average loss of ₹20 per quintal to farmers. This, he argued, was in stark contrast to the UPA years, when the CAGR for FRP was 12.96%.
The Chief Minister accused the Central Government of "artificially pegging higher" the recovery rate to manipulate the numbers. "While it was 9.5% during UPA, the NDA government raised it to 10.25%, reducing the effective FRP," the letter stated. "On a comparable 9.5% recovery rate, the present FRP is only ₹329 per quintal, making the real growth a meagre 3.8% CAGR. This manipulation of numbers has betrayed the farmers."
Siddaramaiah also refuted the Centre's portrayal of ethanol blending as a "boon" to the sugar sector. He argued that the financial benefits are not being passed on to the farmers.
UPA Era: With ethanol blending below 5% and 9.5% recovery, the FRP recorded a robust CAGR of 12.96%.
NDA Era: With ethanol blending at approximately 20% and 10.25% recovery, the CAGR has "dropped to just 3.8%."
He noted that ethanol supply from Karnataka distilleries has only "marginally" increased from 38 crore litres in 2022-23 to 47 crore litres in 2024-25, despite an installed capacity of 270 crore litres.
The larger question remains unanswered," he wrote, "why has the benefit of ethanol blending not been passed on to the farmers?
The Chief Minister made several demands and accusations:
New MSP mechanism: He urged the Centre to devise a new MSP for sugar that categorises "domestic and commercial consumption separately," so that higher profits from commercial sales are reflected in the price paid to farmers.
Data transparency: Challenging claims that the Centre has provided "substantial financial assistance" to sugar mills, Siddaramaiah demanded the "mill-wise data" of such support in Karnataka to verify if the benefits "have truly reached the intended stakeholders."
Absence of Union Ministers: He expressed disappointment that "none of the Union Ministers from Karnataka attended the meeting held on 7th November 2025," where stakeholders were invited to discuss the issue.
Tax devolution: He accused the Union Government of a "step-motherly attitude," claiming Karnataka has been denied "over ₹2 lakh crore" in its rightful share of tax devolution and grants over the past five years.
Siddaramaiah concluded with a direct appeal to Joshi as a "senior Union Minister from Karnataka" to "stand with the farmers."
"The real measure of governance is not in statistical claims but in the smiles on the faces of farmers," he wrote.
