Santalum macgregorii (sandalwood), which is endemic to the southern part of Papua New Guinea (PNG), has been heavily exploited for its fragrant heartwood and is classified as threatened across its natural range. Domestication and smallholder agroforestry offer the means to preserve remaining diversity. This study was undertaken to understand the extent of remaining natural variation to support the species's conservation and domestication. We evaluated morphological, heartwood and essential oil characters in 126 S. macgregorii trees in five populations (districts) in PNG's Central, Gulf and Western provinces. The heartwood oil of this species is characterised by extreme tree-to-tree variation in key fragrant compounds. Proportions of individual compounds range from negligible to high for (Z)-α-santalol (0.5-51%), (Z)-β-santalol (0-24.2%), (Z)-nuciferol (0-40.5%) and (Z)-lanceol (0-72%). Despite the wide variation found within populations, an ordination of seven oil constituents revealed broad provenance-based variation in which trees from the eastern provinces (i.e. Central and Gulf) were more influenced by (Z)-nuciferol content and the trees from the Western Province site were more strongly influenced by (Z)-lanceol. The driver of this variation was the different associations between oil constituents, with (Z)-α-and (Z)-β-santalol both negatively correlated with (Z)nuciferol for sites in the eastern provinces and (Z)-lanceol in Western Province. No evidence of distinct chemotypes was found, with continuous variation demonstrated across all major oil constituents. Of the trees surveyed with a basal diameter of >10 cm, 79% had heartwood. Mean heartwood percentage was 15.8% of basal area, with no significant differences between sites. Significant tree-to-tree variation in heartwood percentage (0-61%) was found. A modest positive correlation was found between stem and heartwood diameter (r = 0.39). Heartwood percentage and heartwood oil quality varied independently and, therefore, independent selection of these traits may be required for their simultaneous improvement. The population in Western Province is non-contiguous with those in the eastern part of the species distribution. It also has a distinct phenotype based on oil composition, leaf shape, flower colour and potential reproductive failure. It is possible that sandalwood in Western Province is more closely related to the proximal populations of S. lanceolatum in Cape York Peninsula, Queensland, than the more distant populations of S. macgregorii in PNG. While these phenotypic features do not necessarily discriminate a new species, molecular genetic research is required to determine the potential existence of a cryptic species of sandalwood. The implications of the variation found in S. macgregorii are discussed with respect to its domestication and conservation.

The harvest and trade of sandalwood (Santalum macgregorii) from natural stands began in Papua New Guinea (PNG) in the late nineteenth century. Sporadic harvesting has occurred intermittently since then and continues to this day, with little active management to promote regeneration. This study was undertaken to determine the state of natural sandalwood resources in PNG, clarify the associated regulations for monitoring its trade and export, and identify practical options for local resource restoration through family and clan plantings. We studied export permit data, interviewed resource owners and traders, evaluated forestry legislation and regulation and engaged landowners in three areas of the country to establish sandalwood plantings. We found few regulations or monitoring protocols for sandalwood harvesting and trade in PNG. Export declarations are the only means for reporting the grades and volumes traded. There is evidence that both grades and prices have been underdeclared at point of export. No export permits in the last eight years contained records of any high-grade (A) products, and declared export values were lower than domestic prices paid to resource owners. Export records since 1997 reveal that significant volumes of up to 126 tonnes annually were traded in the early 2000s. The natural resource is yet to fully recover, with much lower volumes exported.To address the reduction in availability of natural sandalwood, we engaged landowners in three locations to establish sandalwood plantings. The results demonstrate that sandalwood, grown in agroforestry systems, can be productive in PNG, with mean basal stem diameter increments of up to 2.0 cm y −1 recorded. To further develop the sandalwood sector in PNG, we make four recommendations: (1) establish a ten-year moratorium on the sandalwood trade to enable the recovery of natural populations; (2) develop a product grading and sales registry system to improve trade transparency and monitoring; (3) reallocate the tax revenues generated from sandalwood exports to the PNG Forest Authority to fund the monitoring of harvesting and trade; and (4) promote options for resource restoration through family garden, boundary and enrichment plantings. The sandalwood industry in PNG has the potential to be viable and sustainable if the proposed recommendations are adopted by appropriate stakeholders to manage production and regulate the trade in the country and internationally.