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Before the discovery of gold in Western Australia, the harvest and export of sandalwood kept the young colony solvent, and even helped pay for the colonists' thirst for China tea.

Today, almost 170 years since it was first exported from Fremantle, the insignificant parasitic tree may be poised to contribute to the economy again, with world demand outstripping supply.

There was mass clearing of sandalwood in WA from the 1840s, to the extent that legislation was enacted to temper the destruction. In the 21 ^st century, landscapes where sandalwood once flourished naturally may soon support plantations because heartwood within a sandalwood tree's trunk contains one of the most sought-after essential oils: sandalwood oil.

While the sesquiterpene components that make up the oil protect the tree's core from fungal and insect attack, the oil also has health benefits for humans. As well, it provides the base note for the world's most expensive perfumes.

Woylie essential for natural regeneration

The regeneration of naturally occurring WA sandalwood has a unique aspect which, in the light of a growing human population, is its Achilles heel: the seed has to be buried for it to successfully establish. A sequence of wet and hot dry days cracks the seed shell allowing for germination but if the emerging seedling is not covered, it desiccates and soon dies.

It is up to a native marsupial, the woylie, to bury the seed. This animal does so to secure a later food store but the introduction of foxes and cats has played havoc with woylie populations and even populations protected from these predators have declined in recent drought-affected years. Successful regeneration is also threatened by increasing numbers of goats on pastoral leases.

So unless major human intervention occurs, the accumulating evidence points to the extinction of sandalwood as the natural seed dispersal and regeneration cycle has been destroyed.

Australia is no different from any other Pacific Rim country when it comes to exploitation of valuable sandalwood trees. Over-extraction has also occurred in India and exacerbated by the spread of sandalwood spike disease. The regulation of sandalwood sales from India caused a world-shortage and prices doubled. To date, this shortage has been compensated for by the harvest of Osyris tenuifolia , east African sandalwood, as well as S. album from Indonesia, S. austrocaledonicum from Vanuatu and S. yasi from Fiji. All these countries are enacting conserving strategies.

Plantations the answer

Plantations are therefore the solution to meet the growing demand for sandalwood wood and oil products. Both the native Western Australian sandalwood, S. spicatum , grown through the wheatbelt and goldfields, and the exotic Indian sandalwood, S. album , which is a tropical species grown in the Ord River irrigation area, are grown on plantations in WA. This latter species is now also being grown in Queensland.

Due to economic constraints with land value and establishment and management costs, plantations of these species are expected to provide a return at 15 years for S. album and 25 years for S. spicatum . Both maturation estimates are much shorter than typical natural populations; S. album approximately 50 years and S. spicatum between 80 and 100 years.

There are several other major differences between these two species that set them apart in their plantation system and economics. Understanding their evolutionary origins provides some background to understanding these differences.

The entire sandalwood genus appears to have originated in Australia. Santalum spicatum is one of the most ancestral of the species, equivalent to the crocodile of the animal world.  Its confinement to the south west of Western Australia is likely due to climatic cycling through the Pleistocene. Sandalwood isolated to the north became a melting pot of sandalwood diversification. Speciation occurred through long-range dispersals to the east islands in the Pacific, but it was humans who transported S. album from Timor to India. Perhaps it was also this human selection pressure that has made the genetic diversity of S. album so narrow, with its static oil profile and high santalol content. In comparison, most other sandalwood species including S. spicatum have greater genetic diversity and wide ranging oil profiles, often accumulating less favoured sesquiterpenes for commercialisation.

In economic terms, the biggest difference between S. album and S. spicatum is the frequent presence of the oil component farnesol in the latter. Analyses show that when levels of farnesol are high, santalols are typically low. Farnesol is regarded as an irritant to the perfume industry and thus S. spicatum oil does not make the ISO standard and cannot be mixed into products above a certain proportion. Farnesol separation from the essential oil is an expensive and inefficient process.

Gene regulation explored

Selection and breeding may be a solution to select for oil profiles with low farnesol in S. spicatum .  But as our research explores deeper into the expression of each of the terpene synthase genes, this may not be the total answer. The first piece of evidence was the discovery of just how highly conserved the santalene synthase gene is between each Santalum species. There is less than 2 % amino acid difference between the enzymes of the most advanced to the most ancestral of the species. This is true of many other genes, but it is the differential expression of these genes which can alter the oil profile. So regulation of these genes will prove more important than the genes themselves when it comes to tree improvement, and these regulators could be induced through environmental, disease responses or host-derived stress signaling. So while selection may lead to some improvement of oil profiles, the environment in which this genetic expression occurs needs to be duplicated until this effect is better understood.

The highest prices recorded for sandalwood have been for carving logs. Historically, it has been assumed that large boles correlate to high heartwood and oil content, but with 15 year-old plantations, this is not true. Rapid silviculture improvements through the selection and arrangement of host species in relation to sandalwood are being made to produce rotund S. album trees. As sandalwood is a parasitic species, the old rules of plantation management don't apply. Weeds are not necessarily competition, as sandalwood may well be parasitising them.  Also, sandalwood can parasitise other sandalwood trees, which can potentially retard growth through increased competition.

All the logarithms of classic plantation growth have had to be reviewed and new thinking applied to understand the relationship between sandalwood and host. This relationship changes over time as sandalwood matures and the available hosts vary. While some grasp of optimising wood growth is being understood, we only now have the tools to understand how this relates to heartwood formation on the molecular level.

Understanding heartwood production

The quantity of sandalwood oil within each tree within a plantation can differ dramatically between trees. Some trees, even at 10 years of age, may not have started laying down heartwood, which contains the valuable sandalwood oil, while a neighbouring tree may contain more than 30% of heartwood. The quest to understand what stimulates heartwood production is the drive of our present research. A correlation between heartwood fungal rot originating from the base of the tree has shown positive oil-stimulating effects, whilst fungal rot from a break in the protective bark can kill the tree through its spread and secondary exposure to insects such as termites.

The discovery of genes and enzymes involved in the biosynthesis of sandalwood oil has propelled our research into a new realm. However, in the short-term, these gene discoveries have opened the door to new technologies which enable the in vivo production of sandalwood oil in engineered microorganisms.

Different markets for synthetic compounds

Because of the shortage of sandalwood oil, some of the world's largest fragrance and flavour companies have been searching for chemically synthesised compounds with organoleptic properties similar to that of the authentic oil. A number have been introduced to the market and they occupy a new niche of single pure compounds that can be accurately included into a formula for reliable product repeatability.  The biosynthetic production of sesquiterpenes using the sandalwood genes in yeast constructs produces the exact same sesquiterpenes as produced in the heartwood. The greatest difference between these biosynthetic sesquiterpenes and the natural sandalwood oil is the composition, the latter can contain up to 100 different components. As a result, biosynthetic sesquiterpenes and natural sandalwood oil will occupy different markets.

Australia has a well established sandalwood tree market based on the native harvest of S. spicatum . To take advantage of this market knowledge and network, the challenge is for a smooth transition from wild harvest to plantations. To add value to this market is to take advantage of the cutting edge science currently being undertaken within Australia to optimise both the plantation system and the economic viability of the products from these trees.

Dr Liz Barbour, Research Development Officer, Faculty of Natural and Agricultural Sciences, The University of Western Australia

Published in Australian Research and Development Review, January 2011