Bid to help revive sandalwood exports

SANDALWOOD stakeholders in Vanuatu have formed an association to help revive sandalwood exports. This means key representatives from the public and private sectors of the industry now have a common platform through the Vanuatu Islands Sandalwood Association (VISA) where they can meet and discuss industry challenges and identify appropriate and suitable solutions to those issues.

Sandalwood is a relatively small export industry for Vanuatu but is a high-value product with potential to grow given the strong global demand and establishment of new plantations. In 2007, exports of sandalwood logs were valued at over 100 tonnes, returning USD1million to landowners. While this declined to 11 tonnes (USD0.23million) in 2016 due to the depletion of the natural resource, there are now significant plantation stands of sandalwood due to come into production in a few years which could lead to improvements in export volumes.

The establishment of the association has received significant support from the Australia and New Zealand-funded Pacific Horticultural and Agricultural Market Access (PHAMA) Program which also played an important role in the formation of industry working groups for cocoa, livestock and kava as a way of fostering improved communication between the public and private sectors to advance the industry.

PHAMA conducted a value chain study for sandalwood in Vanuatu to assist in understanding the challenges and opportunities in the sector.

The study indicated there was opportunity to support improvements in export pricing for sandalwood exporters and landowners.

In September 2017, a meeting was arranged with industry stakeholders to consider the study findings after which it was agreed that a Sandalwood IWG be formed with support from PHAMA.

It was also agreed that PHAMA would investigate the potential of an auction system for sandalwood and that the VISA would work with other stakeholders to develop an implementation plan for the auction system and facilitate improved linkages with international buyers and end markets.

PHAMA will consult with the Vanuatu Government and individuals who are familiar with the establishment of auction systems and conduct research to assess options for the proposed auction system.

The program will also initiate engagement with buyers in Australia, China, India and other countries to understand their perspectives on the Vanuatu industry and potential interest in involvement in an auction process.

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