Investment Immigration Vanuatu Learn about the Vanuatu Economic environment:
1. Vanuatu Sandalwood Varieties and Distribution
The sandalwood resources in Vanuatu are mainly distributed on Santo Island and Erromango Island, with sporadic discoveries on other islands. Santalum austrocaledonicum is the primary sandalwood species in Vanuatu, favored in the international market for its high oil yield and rich, long-lasting fragrance. It is widely used in the manufacture of perfumes and cosmetics, and can also be used for medicinal purposes or crafted into artisanal products.
2. Vanuatu Sandalwood Production and Export
According to statistics provided by the Vanuatu Ministry of Forestry, from 1977 to 1987, the volume of sandalwood logging increased annually, peaking at 204 tons in 1987; logging was zero from 1988 to 1990. After 1991, many sandalwood traders entered the Vanuatu market, and logging volumes rose again, reaching 134 tons in 1994; the total logging volume of Vanuatu sandalwood was 76 tons in 2008 and 73 tons in 2009.
Vanuatu sandalwood products are primarily exported to overseas markets such as India, Taiwan, Hong Kong, and France. In 2009, exports included 55 tons of wood carvings, 11 tons of oil, and 128 tons of sawdust powder.
3. Vanuatu Government Policies and Regulations on Sandalwood Logging and Trade
The Vanuatu Ministry of Forestry is primarily responsible for the management of sandalwood logging and trade, issuing procurement quotas and export licenses. Upon payment of fees and obtaining procurement quotas, purchasers can buy from farmers at the logging site according to the quota, with logging operations carried out by the farmers, followed by transactions at market prices.
The Vanuatu Ministry of Forestry designates the dry season from June to September as the "Sandalwood Logging and Trade Season," with three months designated for normal logging and trading, and the fourth month allowing purchasers to buy remaining stock. The Ministry also stipulates that wild sandalwood must have a diameter of over 15 centimeters and a height of over 50 centimeters to be logged. Additionally, if excessive logging of wild sandalwood is discovered, leading to resource depletion, the Vanuatu government may declare a logging ban, with the duration determined based on actual conditions.
In the 1920s, some foreign companies discovered Vanuatu's sandalwood resources and began logging, leading to a certain scale of commercial activity by the early 1970s. Due to excessive logging of wild sandalwood, resources sharply declined, prompting Vanuatu to implement the "Sandalwood Trade and Export Management Act" in 1997, which established a licensing system for sandalwood procurement and export while encouraging replanting. In 2004, based on the "Forestry Law" and the need to increase employment opportunities and enhance the added value of sandalwood exports, Vanuatu prohibited the export of raw sandalwood logs, allowing only the export of processed sandalwood products such as oils, powders, waste materials, carved wood, or wood carvings.
The Vanuatu government customs does not impose export duties on sandalwood products, but exports must apply for export licenses from the Vanuatu Ministry of Forestry based on procurement quotas and pay licensing fees, with export quantities generally not exceeding the annual quota limit. The Ministry of Forestry is also responsible for issuing certificates of origin for timber exports.
Furthermore, the Vanuatu government encourages farmers to replant sandalwood, conducting nursery experiments with superior tree species from different forest areas, and subsequently providing seedlings to farmers for replanting. The government offers technical support and relevant training. Currently, Vanuatu has cultivated 200,000 sandalwood seedlings in nurseries, with over 10,000 two-year-old seedlings planted over an area of 97 hectares.
4. Major Sandalwood Traders in Vanuatu
Currently, the Vanuatu government has authorized only two companies to operate sandalwood trade in Vanuatu: Tropical Rainforest Aromatics (TRA) and Far North Oils Ltd. These two companies have each been granted an annual procurement quota of 40 tons, with quotas issued every ten years.
In 2007, the Vanuatu government attempted to issue quotas to more purchasers to increase export revenue. Subsequently, TRA filed a lawsuit against the government in local court, claiming that increasing procurement quotas would lead to excessive logging of Vanuatu sandalwood resources, making sustainable development impossible. Ultimately, the court ruled against the Vanuatu government and revoked the procurement quotas issued to parties other than the two companies mentioned above.
5. How Chinese Enterprises Can Enter the Vanuatu Sandalwood Market
Currently, Vanuatu's sandalwood resources are extremely scarce, and the Vanuatu government has no intention of issuing more licenses for the logging of wild sandalwood resources. Additionally, it has stipulated that overseas customers wishing to purchase sandalwood products must procure through the aforementioned two companies.