Legalise Red Sanders Cultivation for Export Earnings

A Sathyanarayana – Trade Expert

In the wake of recent gunning down of 20 people in Andhra Pradesh said to be smugglers of Red Sanders, people ask why there is such a premium on Red Sanders leading to smuggling. Why should Government make it so restrictive to export?

Red sanders (Pterocarpus Santalinus), also known as red sandalwood, is a valuable wood which has a huge demand overseas, particularly in China, Japan and East Asia, where it is used for making cosmetic products, Ziltan furniture, musical instruments, medicines, and in cooling nuclear reactors. Many confuse this species with aromatic sandalwood of Mysore Origin (Santalums Album), the fact is Red Sandalwood is not aromatic at all and its heartwood is very hard to cut.

Each tonne of red sanders commands a price of Rs 25 lakh in the international market. A year back the China price was Rs 1 cr per ton from the local warehouses in Bejing, Shanghai, Guanzhou etc. The price came down to Rs 40 lakhs after the Andhra Pradesh Government sold over 4000 tons of seized Red Sanders in April 2014.

Red sanders is endemic in Seshachalam, Veliganda, Lankamala, and Palakonda hill ranges in districts of Kadapa, Chittoor, and Kurnool in Rayalaseema region and parts of Nellore and Prakasam Districts of Andhra Pradesh and Javajimalai in Tamil Nadu. Majority of red sanders smuggling takes place from Chittoor and Kadapa. The total area of Red Sanders forest is said to be around 4.50 lac acres

The species Pterocarpus Santalinus (Red Sanders) is placed in Convention on International Trade in Endangered Species (CITES) Appendix 2, which is not so restrictive to trade, however, Government exim policy placed this species under restricted list requiring export licence which is usually given to Andhra Pradesh State Forest Development Corporation Ltd. as the authorised export agency. Last year CITES gave a one-time relaxation permitting India to export 11,806 MTs of seized and confiscated red sanders in any form, including log form. The Director General of Foreign Trade (DGFT) issued notification permitting AP government to export 8,584 MT of red sanders wood in log form by amending EXIM policy.

The sale of this seized red sanders (confiscated from smugglers who illegally cut the trees at Seshachalam forests) was conducted for six days from September 19 for selling 4,160 MTs of red-sanders wood in 177 e-lots containing 1,77,877 logs in first phase on electronic platform by e-tender-cum-e-auction process.

The government has fixed a starting price of Rs 8 lakh to Rs 12 lakh per MT for A, B, C, and non-grades respectively. At the end, the Government got Rs 1000 crores of which, 30% is to be utilised for the protection of naturally grown red sanders forest. The average price realised was about 24 lacs per ton which is 50% lower compared to ex. warehouse delivery in China.

It is not clear why after several road-shows and bidding meetings in China, Japan, Germany, the Government could realise only Rs 1000 cr should have been at least 100% higher. Government encourages forex earnings setting up warehouses overseas and show case Indian origin goods, sell off-the-shelf to earn foreign exchange. Why not the same method be used for selling super demand item like Red Sanders to earn higher foreign exchange.

This species commercially has no value within India, CITES places it in Appendix II requiring their permission to sell this placement is questionable. It seems that just because the species is available only in India and nowhere else, this wood species gets into CITES Appendix II.

The Indian Government’s recent FTP announced a target of USD 900 billion exports to be achieved by 2020, Government of India should look into 3 main questions.

1.  Why this species has to be placed in CITES list of restriction.

2.  Given that there is no use domestically, why not this wood species can be freely permitted to be exported earning much needed hard currency, achieve much talked export target

3.  Why are villagers and farmers not permitted to grow this tree and freely exports creating local jobs and remunerative farming business in South India.

It is said Appendix II of the CITES listing requires a scientific study of the species in question called an Non-Detrimental Finding (NDF). This NDF empirically determines whether some of the resources can be used in commercial international trade in a sustainable manner without affecting the abundance and growth of the species in the wild. Yet, continued logging and trade led to CITES imposing an absolute ban on India in the international trade of Red Sanders.

In 2010, the MOEF finally sanctioned an NDF study on Red Sanders that was awarded to the Institute of Forest Genetics and Tree Breeding (IFGTB), Coimbatore. The final report was submitted to the management authority in December 2011 and outlined three major recommendations:

1.  Harvest of Red Sanders from the wild is not possible at present and export from the source is not possible for the next 10 years as the species is under great stress in the wild and requires drastic protection measures by the AP State Forest Department. A study needs to be conducted after 10 years to assess the growing stocks of Red Sanders in the wild before taking a decision of harvest from the wild and its international trade.

2.  The IFGTB has assessed that there is a stock of around 11800 metric tone (MT) of seized Red Sanders lying in the country, which needs to be disposed off. The method of disposal suggested by IFGTB Is that this material may be allotted to Government Handicraft Units for handicrafts making which would help the indigenous artisans. (In my opinion, this suggestion will not work because artisans in India do not like this wood because it is extremely hard heartwood not easy to cut or craft or even nail it)

3.  The IFGTB also suggested that they have not conducted Non Detrimental Finding (NDF) of Red Sanders for plantations and this should be done.

The CITES rules make it mandatory that the NDF be done by the Scientific Authority (SA) of the country, in this case IFGTB. The advice of the SA is final and binding on the Management Authority (MA), in this case the ADG (wildlife)

Experts estimate that only about 10 percent of smuggled Red Sanders is seized by forest officials across the country. Currently a total of almost 11,800 MT of seized stock is lying with various state governments in India and of this number, 8000 MT was with the Andhra Pradesh Forest Department, alone. In order to dispose of the colossal amount of seized contraband, the AP Government put pressure on the Centre for a one-time approval to sell the stock.

Even more damming is the fact that though no NDF study has been done of Red Sanders from plantations, the MA has fixed a quota of (approx) 300 MT of Red Sanders for export, sourced from plantations. Although Red Sanders grown in plantations are as good as natural forests, there were no immediate buyers from overseas since naturally available Red Sanders were plenty, the overseas buyer prefers them. Consequently only two applications were found in the Ministry of Forestry for export licence for the 300 tons.

Red Sanders Specs

Recommended for plantation on lateritic loam, quartzite shale and lime stone. It requires perfect drainage and is found mainly on stony or gravelly soils. Pterocarpus santalinus is a light-demanding small tree, growing to 8 metres (26 ft) tall with a trunk 50–150 cm diameter. It is fast-growing when young, reaching 5 metres (16 ft) tall in three years, even on degraded soils. It is not frost tolerant, being killed by temperatures of “1°C.

Due to its slow growth and rarity, furniture made from zitan is difficult to find and can be expensive. It has been one of the most prized woods for millennia.

The wood has historically been valued in China, particularly during the Qing Dynasty periods, and is referred to in Chinese as zitan and spelt tzu-t’an by earlier western authors such Gustav Ecke, who introduced classical Chinese hardwood furniture to the west.

In View of the above, it is strongly suggested to the Government that efforts to remove this species from the restricted list and permit growing this tree, and harvest it for export, which will save lives of several villages around these forests now under sleepless nights and also pave the way for earning huge foreign exchange assisting the Government to get hold of the USD 900 billion target of exports.

Amara Sathyanarayana, Trade Expert