Sandalwood Oil Market

Sandalwood Oil Market Outlook 2025 to 2035

The global sandalwood oil market is projected to increase from USD 127.6 million in 2025 to USD 207.8 million by 2035, with an annual growth rate of 5.0%. Growing demand from a variety of industries, as well as consumer preferences for natural ingredients and sustainable sourcing, are driving this strong expansion.

What are the Drivers of the Sandalwood Oil Market?

Because of its unique, woody, warm, and enduring scent, sandalwood oil is a highly valued ingredient in the cosmetics and perfumery industries. It gives perfumes depth and longevity and works well as a base note and fixative in luxury scents. Because of its alleged anti-inflammatory, antiseptic, and calming qualities, it is also becoming more and more common in high-end skincare products.

Genuine sandalwood oil is in high demand in products ranging from lotions, soaps, and creams to anti-aging formulations because consumers are looking for natural and high-quality ingredients in their beauty routines. One important driver is the growth of the global beauty industry, especially in developing nations where people's disposable incomes are rising.

One of the main factors propelling the sandalwood oil market is the growing interest in holistic health, natural remedies, and wellness practices around the world. Sandalwood oil's calming, grounding, and stress-relieving qualities make it a popular choice in aromatherapy.

It is frequently used in massage oils, diffusers, and meditation techniques to encourage emotional equilibrium, mental clarity, and relaxation. The demand for sandalwood oil in aromatherapy and wellness centers, as well as for home use, is rising as consumers place a greater emphasis on mental health and look for natural alternatives for stress relief and improved sleep. The increasing number of spas and wellness retreats using essential oil therapies lends more credence to this trend.

Because of its antiseptic, anti-inflammatory, and astringent properties, sandalwood oil has long been used in traditional medical systems, especially Ayurveda and Traditional Chinese Medicine. It is used to treat inflammatory diseases, infections, and a variety of skin conditions.

Sandalwood oil is finding new uses in a variety of medicinal formulations as a result of the growing fusion of traditional knowledge with contemporary pharmaceutical research. Its inclusion in a greater variety of pharmaceutical and nutraceutical products is being driven by its potential health benefits, which include effectiveness against specific skin cancers when applied topically. The modern healthcare sector's increasing recognition of its therapeutic value creates a steady demand floor for the market.

Metric	Value
Industry Size (2025E)	USD 127.6 million
Industry Size (2035F)	USD 207.8 million
CAGR (2025-2035)	5.0%

What are the Regional Trends of the Sandalwood Oil Market?

The production capacities, customary applications, and changing consumer preferences all have an impact on the unique regional dynamics of the global sandalwood oil market.

In addition to having the largest market share in the world for sandalwood oil, the Asia Pacific region is also expected to grow at the fastest rate. Its historical and cultural associations with sandalwood are inextricably linked to this dominance.

Two important production centers are India, which has historically produced Santalum album (Indian sandalwood), and Australia, which produces a lot of Santalum spicatum (Australian sandalwood) and more and more Santalum album through plantations. There is a significant base demand due to the extensive traditional use of sandalwood oil in Ayurveda, religious rituals, and personal care in nations like China and India.

Additionally, the use of high-end cosmetics, fragrances, and aromatherapy products containing sandalwood oil is growing due to rising disposable incomes in populous countries like China and India. Another important element affecting the supply situation in this area is government programs encouraging sustainable farming in response to past overharvesting. Further driving market expansion are the growing beauty and wellness sectors in Asian nations, which are especially interested in using natural and traditional ingredients.

With a strong consumer preference for natural, organic, and ethically sourced products, North America is a sizable market for sandalwood oil. One of the main drivers is the region's thriving aromatherapy and essential oil market, where consumers are increasingly turning to sandalwood oil for meditation, relaxation, and stress relief.

Another major factor driving market expansion is the growing demand for natural fragrances and clean beauty products in the US and Canada. Despite not being a primary producer, North America is a significant importer with a discerning consumer base that values product authenticity and sourcing transparency. The market's growth is further supported by the existence of well-known essential oil brands and a developing wellness sector.

Europe has a sizable market share for sandalwood oil, mostly due to its established and prosperous luxury fragrance sector. Sandalwood oil is highly prized by European fragrance houses for its distinctive scent and fixative qualities in luxury fragrances. The demand for natural cosmetics and aromatherapy is also high in the area.

Quality control, sustainability, and ethical sourcing are highly valued by European consumers and regulatory agencies. This influences supply chain procedures worldwide and increases demand for certified and sustainably produced sandalwood oil. Key consumers from nations like France, Germany, and the UK exhibit sophisticated tastes for natural and high-quality ingredients.

With rising disposable incomes, changing consumer tastes for natural products, and a growing interest in wellness and personal care, Latin America is an emerging market for sandalwood oil. Even though the market is currently smaller than in developed areas, urbanization and the growth of the cosmetics and beauty sector are opening up new markets for sandalwood oil. Demand is anticipated to be fueled in the upcoming years by the growing but still nascent interest in aromatherapy and natural remedies.

Due in large part to its historical use in incense, perfumes (particularly those based on oud), and cultural customs, sandalwood oil continues to be in high demand throughout the MEA region. Because of its rich, exotic notes, sandalwood is highly prized in the Middle East's luxury fragrance market.

Although the market is still in its infancy, rising disposable incomes and exposure to international beauty trends are fueling the demand for high-end personal care products in Africa, some of which may contain sandalwood oil. Aromatherapy is also becoming more and more popular in the area.

What are the Challenges and Restraining Factors of the Sandalwood Oil Market?

The sustainability problem and the prevalence of illicit harvesting are two of the biggest obstacles facing the market for natural sandalwood oil. The most sought-after species in the past, Indian sandalwood (Santalum album), was severely overharvested in the past, resulting in its endangered status and stringent trade regulations (such as CITES).

The slow maturation period of sandalwood trees (15-20 years for oil-bearing heartwood) makes it challenging to increase supply on a large scale right away, even though coordinated efforts in sustainable cultivation, especially in Australia and India, are helping. Legitimate companies and conservation initiatives are impacted by the ongoing threat of illegal logging and smuggling. For the industry, ensuring ethical and sustainable sourcing that can be verified is still a difficult task.

Because mature trees are scarce, cultivation is intensive, and high-quality heartwood requires a long growth cycle, natural sandalwood oil, especially from premium sources like Indian sandalwood, is naturally costly.

The high cost of production is also a result of the labor-intensive extraction techniques. Its high cost may prevent it from being widely used, especially in mass-market goods, and it may also incentivize formulators to look for less expensive substitutes. Price volatility and supply chain vulnerabilities are also brought on by the scarcity of genuine, premium natural oil.

Country-Wise Outlook

Countries	CAGR (2025 to 2035)
United States	3.9%
China	6.3%
Japan	5.7%

United States Sandalwood Oil Market Sees Sustained Demand in Premium Segments

The United States represents a sizable consumer market for sandalwood oil. The demand is concentrated in high-end cosmetics and personal care products, where sandalwood oil is prized for its opulent scent and skin-improving qualities.

Additionally, the US market is a significant center for aromatherapy, with a high rate of essential oil adoption for a range of health and wellness uses. US-based businesses frequently place a high priority on ethical and transparent sourcing, appealing to a discriminating customer base that appreciates sustainability. The steady rise in demand for premium sandalwood oil is supported by consumers' growing interest in health and wellness trends as well as their increased disposable income.

China Witnesses Rapid Expansion Driven by Traditional Use and Growing Consumer Spending

The market for sandalwood oil in China is expanding quickly, securing its place as one of the Asia Pacific region's main growth engines. The nation's long-standing custom of using sandalwood for incense, traditional medicine, and cultural rituals is what is driving this expansion.

At the same time, there is a strong demand for sandalwood oil in high-end cosmetics and fragrances due to China's expanding cosmetics and personal care sector, which is being driven by growing disposable incomes and a growing middle class. Chinese buyers are spending more money on premium, natural ingredients. The wellness and aromatherapy industries are also expanding significantly, which is helping the market as a whole. China is positioned as a vibrant and quickly expanding market for sandalwood oil due to the country's traditional appreciation and contemporary consumer trends.

Japan Sees Stable Demand with an Emphasis on Quality and Traditional Appeal

The use of sandalwood oil in upscale cosmetics, upscale fragrances, and traditional rituals is the main factor driving the market's steady and steady demand in Japan. Natural sandalwood oil's premium quality is in line with Japanese consumers' strong preference for goods of the highest caliber and purity.

The market is mature and appreciates authenticity and craftsmanship, even though the growth rate may not be as rapid as in some emerging economies. In Japan, sandalwood is also culturally significant, especially when it comes to incense for religious rituals. The nation's strong emphasis on natural beauty products and holistic wellness contributes to the ongoing demand for sandalwood oil in a variety of applications.

Category-wise Analysis

Natural Sandalwood to Exhibit Leading Share by Product

In the sandalwood oil market, the Natural Sandalwood segment is anticipated to hold the largest share by product. There are multiple reasons for this dominance. Primarily, natural sandalwood oil, particularly from species like Santalum album (Indian sandalwood) and Santalum spicatum (Australian sandalwood), provides a rich and highly valued scent that is difficult for synthetic substitutes to completely capture.

Beyond its aroma, natural sandalwood oil has well-known medicinal qualities (such as anti-inflammatory, antiseptic, and anxiolytic) that are highly prized in aromatherapy, conventional medicine, and luxury skincare products. Natural, clean-label ingredients are becoming more and more popular among consumers who think they are safer and more efficient.

Notwithstanding its higher price point and supply limitations, genuine natural sandalwood oil is still in high demand due to the premium market and applications needing real therapeutic benefits, even though synthetic alternatives are more affordable. The natural segment's long-term viability is being further supported by sustainable cultivation initiatives.

Personal Care Sector Category to Hold Leading Share in Sandalwood Oil Market by Application

According to the application, the Personal Care Sector Category is anticipated to hold the largest share of the Sandalwood Oil Market. The widespread use of sandalwood oil in a variety of cosmetic and personal care products is what propels this market's dominance. Its distinct, enduring scent makes it a sought-after component of high-end perfumes, colognes, and exquisite fragrances, acting as a fixative as well as a main scent.

In addition to its fragrance, sandalwood oil is used in high-end skincare products, lotions, soaps, creams, and anti-aging formulations because of its anti-inflammatory, antiseptic, and moisturizing qualities. The leading position of the personal care industry, which includes everything from luxury beauty brands to natural product lines, is further cemented by the growing consumer demand for natural and organic ingredients in their daily grooming and beauty routines.

Asia Pacific holds the Leading Share in the Sandalwood Oil Market

According to projections, Asia Pacific will have the largest regional share of the global sandalwood oil market. The dominance of this region has many facets, stemming from both historical significance and current market dynamics.

Due to their established cultivation methods and favorable climate, nations like Australia and India are the main producers of sandalwood species. For centuries, sandalwood has been used in religious ceremonies, Ayurvedic medicine, and personal hygiene routines throughout Asia, guaranteeing a steady and deeply rooted demand.

Demand for high-end cosmetics, perfumes, and aromatherapy products with natural ingredients like sandalwood oil is also rising as a result of the fast economic development and rising disposable incomes in populous countries like China and India. Together, the region's burgeoning wellness and beauty sectors and rising interest in conventional treatments support Asia Pacific's notable and enduring market dominance.

Competitive Analysis

The sandalwood oil market is highly competitive, with major players Eden Botanicals, Katyani Exports, Quintis (Australia) Pty Ltd., R K Essential Oils Company, Santanol Group, Albert Vieille SAS, Plant Therapy Essential Oils, and Khadi Natural.

The sandalwood oil market is extremely competitive. In response to concerns about overharvesting, businesses are concentrating on sustainable sourcing and cultivation; some even own or collaborate with certified plantations to guarantee ethical practices. To gain the trust of customers, companies must rigorously test their products to ensure their authenticity and purity, particularly in premium markets.

Many businesses use sandalwood oil in perfumes, cosmetics, personal care items, and aromatherapy blends to broaden their customer base. Additionally, they use e-commerce and direct-to-consumer business models to increase visibility and price control.

Key tactics include research and development into better cultivation practices, extraction methods, and novel therapeutic applications; collaborations with pharmaceutical and cosmetic brands aid in securing long-term agreements and broadening the uses of products. Products are further differentiated in the market by effective brand building through storytelling that emphasizes sustainability and heritage.

Recent Developments

• In 2024, despite its position as the world's largest producer of Indian sandalwood, Quintis entered receivership in April 2024 due to prolonged financial difficulties and declining market prices. The company is currently exploring options for recapitalization or potential sale.
• In 2025, Plant Therapy Essential Oils, a prominent player in the aromatherapy market, launched a new line of premium personal care products featuring ethically sourced Australian sandalwood oil. This new collection includes a facial serum, a soothing body lotion, and a calming diffuser blend, all formulated to highlight the therapeutic and aromatic benefits of sandalwood.

Segmentation of Sandalwood Oil Market

• By Product :

  • Natural
  • Lab-created

• By Application :

  • Personal Care
  • Aromatherapy
  • Pharmaceuticals
  • Others

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa