Sandalwood has distinct, high-value end uses that function to underpin its price and maintain demand in different market segments and regions. These uses and markets include essential oil from its heartwood as an ingredient (providing woody base notes and fixative properties) in fine perfumes, exclusive natural body-care products and new pharmaceuticals, especially for European and North American markets; in solid furniture, carvings, traditional medicines and religious uses in China, the Republic of Korea and Japan; for attars 1 funeral pyres and chewing tobaccos in India; and customary uses in the Middle East. The markets for sandalwood heartwood and oils from Pacific Island countries have been strong and have continually diversified since exports to China commenced over 200 years ago. The global sandalwood market remains buoyant, with 2019 wholesale prices of Santalum album oil ranging from USD 1750 kg −1 (unlicensed production through Dubai) to USD 2100 kg −1 for licensed production from India and USD 2000-2500 kg −1 as wholesale price for Australian S. album plantation oil. The wholesale price for S. austrocaledonicum oil is USD 1500-1750 kg −1 . The heartwood (air-dried) of S. album is mostly traded by growers for more than USD 100 kg −1 . The price for Fiji's S. yasi heartwood (partly to fully air-dried, 'village gate' price) for carving, furniture, and oil distillation has increased steadily to USD 50 kg −1 in 2019 while the price for grade 1 S. austrocaledonicum heartwood (partly to fully air-dried; 'on the beach' price) is USD 35 kg −1 . The global market for sandalwood products, sustainably sourced from a growing plantation resource in Australia, Asia and the Pacific Islands, is predicted to remain strong up to and beyond 2040. The high rate of increase in sandalwood prices in recent decades is unlikely to continue, however, due to both an expanding supply from increasingly better-managed plantations and the likelihood that, in the longer term, genetic improvement and the adoption of technological innovations will induce earlier and greater heartwood yields in planted sandalwood. Nevertheless, sandalwood prices will remain sufficiently high to make agroforestry cultivation a commercially attractive proposition for efficient Pacific Island sandalwood growers. This paper provides a prognosis for the production of and demand for sandalwood in 2040 for major sandalwood producer regions (Australia, India, Indonesia, Timor-Leste and the Pacific Island nations) and markets (China, Europe, Japan, the Republic of Korea, the Middle East, North America and the United Kingdom). These estimates of production and demand were made to inform prospective sandalwood growers, and especially smallholders in Pacific Island countries, on the likelihood that the current strong demand and prices will continue and the extent to which export/international markets will be affected by the large sandalwood plantations now being established in several countries.

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Santalum yasi is a high-value hemiparasitic tree endemic to Fiji, Niue and Tonga. It has been overexploited for its oil-yielding heartwood and is now threatened. Remaining stands lack genetic diversity and are likely to be suffering from inbreeding depression, although the species still has significant genetic diversity overall. We argue that the best way to conserve this species is through an active domestication program that will adequately sample and conserve the genetic base in ex situ and circa situm plantings. The approach to S. yasi tree-breeding can be characterised as a low-input strategy involving the early use of molecular markers for population parameter determination. Longterm success will have strong interdependent links with the conservation of the remaining genetic resources. A strategy based on recurrent selection and breeding for key traits-including heartwood volume and oil yield per year, oil quality and environmental adaptability related to cyclone resistance and the tolerance of pests and diseases-is recommended. The establishment of genetic conservation stands based on collections of the species throughout its natural range in Fiji and Tonga has commenced. Challenges associated with the conservation and domestication of S. yasi are discussed. These include the advanced age required before oil characterisation can be undertaken; the need to assess genotype-host-plant interactions; and the need for comparatively sophisticated equipment and destructive harvesting to carry out oil assessments. Capacity development of professional staff in the Pacific Islands is an additional prerequisite for implementing an effective strategy. Research into the variation and heritability of heartwood formation and oil characteristics, and a better understanding of the breeding biology of S. yasi and geneflow between it and exotic Indian sandalwood (S. album), are high priorities. It will be more than a decade-probably around 20 years-before S. yasi individuals in planned, well-designed trial plantings have sufficient heartwood development to enable oil-trait assessment. Establishment of such trials is an immediate priority. In addition to this long-term activity, we recommend a simple interim strategy that promotes high genetic diversity of seedling-based planting stock. This can be implemented using a combination of gene conservation stands, progeny trials that can be culled to seedling seed orchards, and genetically diverse community-based seed stands. The strategy will both provide a safeguard against the further loss of diversity and promote wide outcrossing. Releasing fragmented populations from inbreeding depression is expected to increase general vigour.