Cash-strapped Andhra Pradesh is getting ready to auction at least 5,300 metric tonnes of the most prized red sanders to fill its coffers.
This cache includes red sandalwood trees seized over the years from smugglers.
The YS Jagan Mohan Reddy government is looking to raise at least ₹1,500 crore by auctioning the red sanders sometime in February-March.
A preparatory meeting with buyers was held recently to explain to them about the auction and other details about the stock available with Andhra Pradesh. A few buyers from as far as Hong Kong participated in the meeting.
The Andhra Pradesh Forest Development Corporation (APFDC) is the agent on behalf of the state government to conduct an auction.
The auctioning is expected to take place through the Union government-run platform MSTC.
Details of the auction
“We are looking at fetching the maximum amount from the auction of red sanders,” said Principal Chief Conservator of Forests (PCCF) Y Madhusudan Reddy.
“That’s why we wanted to explain to the prospective buyers about the auction and the stock available with us,” he added.
However, the PCCF refused to divulge the upset price — the lowest acceptable selling price in an auction — for the cache.
Grade A red sanders can fetch anywhere between ₹1.8 crore and ₹2 crore in the international market.
Red sanders have a big demand in Asian countries — especially in Japan, China, and Hong Kong.
In those countries, red sanders are used in making furniture, musical instruments, and decorative items.
While there is not much scientific evidence about its medicinal value, it is also learnt that red sanders powder is used in Traditional Chinese Medicine and cosmetics.
What buyers may expect
Until now, successive Andhra Pradesh governments have sold red sanders weighing over 8,498 tonnes, which include Grade A, B, and C stock, and it fetched them more than ₹1,700 crore.
Of this, ₹505 crore was earned just from 2014 onwards, thanks to the selling of 1,251 tonnes of Grade A logs in 13 phases.
The state now eyes around ₹1,500 crore from the cache to be auctioned later this year.
The seized logs are stored at the central facility in Tirupati, which has eight godowns named after Sri Seshasaila and the seven hills of Lord Venkateswara. It is manned by the AP police.
Sources in the Forest Department said 800 tonnes of the current lot are Grade A wood, 1,600 tonnes are Grade B, and 2,900 tonnes are Grade C.
Red sanders grown on shale subsoils at altitudes around 750 metres and in semi-arid climatic conditions have a distinctive wavy grain margin.
Lumber pieces with a wavy grain margin are considered Grade A, and sell at higher prices than standard wood.
What are red sanders?
Red sanders (Pterocarpus santalinus) are a tree species endemic to the forests of Seshachalam, Veligonda, Lankamala, and Palakona Hills of Andhra Pradesh.
They are distributed in only the districts of Kadapa, Chittoor, Nellore, Prakasham and Kurnool, over an area of 5,300.97 sq km. A good crop of red sanders can be seen on the slopes.
However, there is rampant smuggling and felling of red sanders trees in the districts of Chittoor, Kadapa, Nellore, and Kurnool due to demand for it in the international market.
In 2014, a special Red Sanders Anti-Smuggling Task Force (RSASTF) was formed to curb smuggling. Since 2015-16, a total of 1,852 cases have been registered against smugglers and 1,048 non-bailable arrest warrants issued.
In 2020 the Andhra Pradesh government shifted the red sanders smuggling control activity to the newly launched Special Enforcement Bureau (SEB).
Red sanders fell back into the “endangered” category on the International Union for Conservation of Nature’s (IUCN) Red List only in 2021. The species was classified as “near threatened” in 2018.
The latest IUCN assessment stated: “Over the last three generations, the species has experienced a population decline of 50-80 percent. It is assessed as Endangered”.
Red sanders trade
According to the IUCN, international trade of red sanders began in the 16th century — with Europe — for dyeing.
“Trade with Europe continued for a few centuries, with records of 12,782 MT traded to the UK, 1,116 MT traded to France and 1,687 MT traded to India and Sri Lanka between 1882-1883,” said a summary by IUCN. “At this time, the use and trade of the species were unrestricted.”
It added: “However, since 1927, the species has come under national and international legislation, to limit the harvest of the species. Also in this time, the shift in demand for the species moved from dye to timber and from Europe to East Asia and other parts of the globe.”
To internationally trade red sanders, an export license is required, as well as a certificate of origin, the date of procurement, and other details.
“Since the origin of the trade of the species, timber value has increased by $150,000 per cubic metre. The current market value per tonne of red sanders timber is ₹40 lakh (equivalent to $58,040),” pointed out the IUCN.