Forbes-billionaires.jpg' alt='Forbes Online Jobs' title='Forbes Online Jobs' />How Indias Sandalwood Oil trade got hijacked. Dard e sar ke vaaste chandan lagaana hai mufeed, Uss ka ghissna aur lagaana dard e sar yeh bhi to haiSandalwood paste is the ideal cure for a headache, But its preparation and application is a headache in itselfThat Urdu couplet best encapsulates Kannaujs long standing love affair with sandalwood oil and attar perfume. Situated along the mighty Ganga in Uttar Pradesh, Kannauj is one of the oldest cities in the country. In its heyday, it was regarded as the Grasse of the East, after the French town famous as the perfume capital of the world. Given the huge demand for sandalwood oil for making attar, Kannauj became the hub for distilling it even though most of the wood actually grew in the southern states of Karnataka and Tamil Nadu. The city dominated the world market for sandalwood oil for a long time, exporting roughly 1. Image Amit Verma. As Australia started to develop Indian sandalwood plantations, India lost its grip on the Attar trade and resulted in desolate factories. But mention chandan as sandalwood is known in Hindi to Krishna Narain Kapoor, whose family has been engaged in the art of making attar based on sandalwood oil for over a century, and he looks away with a grimace. Why do you ask What good will come of it His bitterness is not without reason. The 6. 5 year old Kapoors ancestor set up the first and biggest modern distilling and perfumery company in Kannauj, Manaulal Ramnarain, in 1. Over time, the family broke into four separate firms. Kapoors firm, Indian Fragrances Chemicals, produced around 8. But now the shutters are down. His is not the only distillery to shut shop. Indias total shipments have plummeted to a paltry 5 tonnes and processors are increasingly buying foreign varieties of sandalwood oil. As for Kannaujs attar industry, it is all but gone. So what went wrong A Raw Deal. Insiders say things started going wrong in 1. U. S. to Restore Full Relations With Cuba. Watch and major. FACT COMMENT Steve Forbes Ominous move. Embassy reopened. Embargo lifted, more or less. Now. an advisor for lenders making online loans. A Guide To Avoiding Fake Watches. Watch. become a contributor to other online publications such as Forbes. Swatch co. and their embargo on. Eisenhowers State Department imposed cuba and embargo the first trade embargo on. Cuba and embargo. Mar 04, 2015 Watch the first. The author is a Forbes. Indonesia, then the biggest exporter of sandalwood in its raw form, banned the export of raw sandalwood. India stepped in to fill the supply void for the Far Eastern countries. They needed sandalwood for their incense industry and in religious ceremonies, and kept bidding the price higher. Exporting raw sandalwood suddenly became more lucrative than making oil. The easy money involved in the supply of raw wood led to its widespread smuggling and mindless exploitation of sandalwood forests. Ironically, it was a well intentioned diktat for protecting sandalwood that delivered the knockout punch. In 1. 99. 6, in an example of the road to hell being paved with good intentions, the central government decided to regulate the export of sandalwood and its oil by imposing export quotas. It set up a system of raw sandalwood auctions. One could export the oil only if one bought the wood. That move constricted supply and jacked up the price of Indian sandalwood oil. Today, it costs anywhere between Rs. Rs 1. 5 lakh per kg. India has out priced itself from the market, while Australia has positioned itself as the dominant supplier of sandalwood and its oil. It has also started growing Indian varieties. Ironically, India will soon begin buying sandalwood oil of the indigenous variety grown in Australia. Indian sandalwood oil is priced at Rs. Australia and three times the price of African sandalwood oil. Selling such a product at a global level is impossible, rues Kapoor. On top of that, it takes inordinately long to get an export licence. The first set of export licenses were issued in 1. How could you wait for two years before delivering an export order No international client will wait that long, says Moraddhwaj Saini, another erst while distiller. The bigger problem as a distiller and exporter is the lack of surety about obtaining the next license and thus guaranteeing regular supplies to ones clients overseas. Kapoor finally brought down the curtains on his distillation plant last year. Now he has a plant worth Rs. Kapoors distillery, one of 2. Kannauj, was the last to be closed down. It was not easy for me to give up on my family business, he says. Image Amit Verma. GOING TO SEED An offshoot of a century old sandal oil distillation business, Indian Fragrances Chemicals used to make 8. My heart skips a beat when I think of chandan, says 8. Saini, wistfully gazing at the twin smokestacks of his idle distillation plant worth Rs. Watch Embargo Online Forbes' title='Watch Embargo Online Forbes' />How the FDA Manipulates the Media. Oransky complained again on Embargo Watch about the FDAs attempts to. Matthew Herper in Forbes. Published online June. Watch Embargo Online Forbes' title='Watch Embargo Online Forbes' />Forbes Online SubscriptionHis factory was one of the first few to shut down in 1. A Fading Fragrance. One obvious fallout of the unabated increase in sandalwood prices is that it has totally distorted the character of Kannuajs USP its traditional attar industry. In the 1. 97. 0s, attar made from top quality sandalwood oil sold as a personal fragrance that from inferior quality oil went into making incense and flavouring pan masala. When oil prices shot up, attar as a personal fragrance became prohibitively expensive. Already, preferences were changing towards modern perfumes this hastened the process. Watch Warning: This Drug May Kill You IMDB there. By the start of the 1. But attar producers had to meet the price compulsions of pan masala and tobacco industry, so they began substituting sandalwood oil with liquid paraffin and other similar compounds as the base note or layer. How can a gutkha a mix of pan masala and tobacco sachet continue to be priced at just Re. Saini. Attar manufacturers had to find some way to substitute sandalwood oil. Today, 9. Kannauj is used for flavouring pan masala and tobacco. Only around 1. 0 1. Of the 5 percent attar produced as personal fragrance, almost all is exported to West Asian countries like Saudi Arabia. Perhaps it may not be wrong to say that a whole generation has gone by without really knowing what true sandalwood oil based attar really smells like, say Pradeep Kapoor with a wry smile. He also belongs to the same family which started the first distillation and perfume factory in Kannauj. His family firm, Jagat Aroma, moved out of the sandalwood distillation business and now exports fragrance components to foreign perfume manufacturers like Lancome, Tom Ford and G Issey. Double Whammy The story of Indias loss doesnt end here. In the late 1. 99. Indias grip on the sandalwood oil trade had begun to loosen, Australia spotted an opportunity and started working on a unique project It started developing plantations of the Indian variety of sandalwood. Australias indigenous variety of sandalwood, Santalum Spicatum, is decidedly inferior to the Indian variety, Santalum Album, in terms of oil content. For that reason, Australia was till then a bit player in the sandalwood export market. This however did not deter the Australian government to put in place the Sandalwood Act of 1. The Act mandates that only a percentage of sandalwood is available for harvest each year and for every tree cut down, a dozen seeds must be planted. At present there are about 2. Australia. Most of these plantations are in Western Australia. The Forest Products Commission FPC, which governs the state owned sandalwood resources of Western Australia, claims to be the largest supplier of sandalwood resources in the world. To the best of my knowledge, there is about 1. Australia, with expectations of this increasing as the plantations mature. The majority of the oil goes overseas, with little consumption in AustraliaI would think in a round about way, India might end up with about 2. Tim Coakley, executive chairman of the Wescorp Group of Companies. Wescorp Sandalwood Pty Ltd is the sole processor, marketer and exporter of Santalum Spicatum for FPC. It is expected that Australia would start exporting the Indian variety of sandalwood oil to India in the course of the next three to seven years. Its really a shame how we have managed to ruin a sector where we enjoyed undisputed dominance. It is the result of over regulation, sighs Pradeep Kapoor. Western Australia claims to be the only region in the world that can guarantee harvest of approximately 2,0. In India exporters like K.