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Program Overview
Background and Long-Term Strategy
The industry of approximately 70 growers, covering about 2000 hectares of cultivated tea trees, is located mainly in northern New South Wales and on the Atherton Tableland in Queensland.
There was an increase demand for tea tree oil in 2008 coupled with price improvements and the seed from the Tree Breeding Program is also in high demand. Demand in 2009 has remained constant despite the global financial downturn. Approximately 425 tonnes of oil was produced in 2007-08 and again in 2008-09 with an estimated gross value of production $18.25million in each year.
Tea tree oil is a component of a very wide range of personal health care, cosmetic and animal care products and the market for the oil in these areas is maturing and continuing to be valued by consumers for its effectiveness. RIRDC research on tea tree oil's therapeutic value provides critical credibility to it as a natural product, as opposed to other essential oils for which this information is often lacking. There are many opportunities for tea tree oil as a natural product ingredient to the mass market via multinational companies.
The key challenge for the industry is to continue to improve profitability and increase demand. Reducing costs of production is not only important as a potential contributor to restoring profitability but also to maintaining Australia's competitive advantage against the rest of the world. As price increases and demand continues to pick up, new plantings in China (estimated 100-200ha) have potential to impact on commercial competitiveness of Australian grown oil. The yield from the improved seed offers significant potential for lowering costs. On the production side, continued work on breeding superior genetic material remains a priority with the identification of unique genetic markers an imperative for the tree breeding program.
The challenges on the demand side are to identify new markets and to consolidate and enhance existing markets that will continue to require large quantities of oil. Building on recent R&D achievements, particularly relating to safety and efficacy, and exploring new options for new applications of tea tree oil are means of attaining these goals. This requires a long-term approach with continued seed funding to demonstrate the oil's capability and stimulating research by others. It is necessary to demonstrate to potential users and regulatory authorities that tea tree oil is safe and effective. This requires a high level of communication to potential users and authorities as well as the development of new information regarding the impact and safety of tea tree oil.
R&D to develop a successful tea tree oil industry has several spill-over benefits. These include:
- benefits to other rural industries from development of alternative agricultural and veterinary chemicals as traditional chemicals are withdrawn from the marketplace by the Australian Pesticides and Veterinary Medicines Authority (APVMA) on the grounds of consumer protection and resistance to the actives
- Leading the way for other Australian natural product industries to address major regulatory requirements for major export markets
- Providing a precedent to other Australian natural products to enter a variety of growing markets
- Potential significant health benefits that address serious infectious disease problems in hospitals and some cancer treatments
- Environmental and regional benefits as tea tree is one of the few crops that can withstand and address the problems of acid sulphate soils
- Contribution to carbon sequestration.
Key long-term strategies
- Enhancing production systems to maintain the competitiveness of Australian growers
- Identifying regulatory regimes and market barriers, and enhancing the ability of industry to meet safety standards
- Demonstrating proof of concept/efficacy for innovative applications of tea tree oil
- Fostering communication that increases understanding and thereby encourages greater use of tea tree oil.