Issue No 12, July 1999.

NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the Advice on Publications Available.

22. The Australian Tea Tree Oil Industry

Ross Garsden
Australian Tea Tree Oil Research Institute (ATTORI)
c/- Southern Cross University
Lismore New South Wales 2480
Telephone: 02 6622 3211
Facsimile: 02 6622 3459
Email: rgarsden@attori.scu.edu.au

Presented to the Emerging Opportunities in Agriculture Information Day held in Tamworth, New South Wales, Friday October 9, 1998

The Australian Tea Tree Oil Industry is emerging as a significant new agricultural industry. Production in 1997/98 was in the order of 400 tonnes, worth around AUD18 million. Prior to the 1980’s, production was a cottage industry, reliant upon the harvesting of ‘bush oil’ cut from native stands of Melaleuca alternifolia, a small tree that occurs in the coastal districts of northern New South Wales and southern Queensland. Annual production from bush harvesting was in the order of 15 to 20 tonnes per annum. The supply and quality of the bush oil was inconsistent.

The first plantations were established in the early 1980’s with little or no knowledge of variations in oil quality and yield. Since then, much work has been done to investigate the variation within the native populations and to develop better seed. The key to international acceptance of Australian Tea Tree Oil is the ability to produce a reliable quantity of product of consistent quality. The industry is therefore dependent upon plantation production.

Plantations vary in size from a few hectares to many hundreds of hectares. The largest single plantation is over 1,500 ha. The industry offers high returns. With production usually in excess of 150kg per hectare per annum and the farm gate price in 1998 of AUD45 per kg, the gross return from a well-managed plantation is in the order of AUD6,000 per hectare per annum.

Tea trees are hardy and adaptable. They are tolerant of drought, flood and frost. However, plantations will not tolerate inundation immediately following harvest and new growth following harvest is sensitive to frost. The plant is virtually dormant when soil temperatures fall below 16^oC. Such conditions can occur naturally on coastal lowlands associated with periods of inundation and can extend inland to Stanthorpe.

The tea tree plant is seriously under-researched and farming systems are being progressively refined to optimise production.

Many plantations have installed extensive irrigation systems to control soil moisture more efficiently but a significant amount of production has been derived from dryland farming as natural rainfall is sufficient to achieve satisfactory production. The tree is tolerant of drought, but is unlikely to produce new leaf or maintain a full canopy if under stress.

Planting density is in the range 25,000 to 40,000 stems per hectare. A typical row spacing of 1 metre between rows and 28 cm between plants within rows will give a plant density around 35,000 stems per hectare. Plantations are generally a row crop being harvested annually with a forage harvester, which aims at removing all the plant material above the ground.

The tree is susceptible to a number of pests and diseases. The most significant threat to a plantation is from weed competition. Weeds not only compete for water and nutrients, but also have the added problem of producing plant material that may lead to contamination of the oil. Weeds must be controlled vigorously to ensure that oil is of good quality.

The major insect pest is a chrysomelid beetle known as the Pyrgo Beetle. It enters a field in swarms, concentrating the damage in localised ‘hot-spots.’ The beetle eats young growth and lays its eggs on the foliage. Eggs emerge as tiny voracious caterpillars (neonates) which strip any flush growth from the plant. The caterpillars pupate in the soil around the plant stem and emerge as beetles to continue the cycle. Control is more effective if populations can be checked early in the season.

There are a number of other insects which can cause damage, but generally the losses are not widespread. The plant is also susceptible to a number of fungal diseases, however these only appear to be significant when plants are stressed.

The bulk material (stems, leaves, trunk and branches) is distilled for around an hour to an hour and a half to obtain the oil which is contained within the leaf. Distillation plants range from crude, labour-intensive boiler set-ups to high-tech mechanised operations.

Distillation technology, whilst relatively straightforward is still being developed to optimise the quality of the product being obtained. Once the distillation process is complete, the cooked biomass is returned to field, sold as mulch or composted for later use in soil improvement.

Products containing tea tree oil include a wide range of personal hygiene (shampoos, conditioners, skin lotions, moisturisers, handwash, face creams, soaps etc), pet care, hospital disinfectants, air conditioning disinfection, solvents, agricultural products and cosmetics.

The major markets are in the US, UK, Europe (especially Germany) and Asia. Until recently demand has outstripped supply and with a number of large operations currently under development, the industry is likely to expand considerably in the near future. The major growing areas are in the northern coastal districts of New South Wales, the Maryborough area in Queensland and in far north Queensland around Mareeba. There is some production occurring overseas, however the bulk of the production is from Australia.

Overseas production is likely to increase and it is vital that Australia maintains the lead in crop management systems, genetic improvement and product research.

ATTORI is an independent research institute. It was established in 1996 on the campus of Southern Cross University in Lismore with the charter of furthering research into plantation production systems, product formulations and stability and efficacy of products containing tea tree oil. The organisation is involved in developing formulations for new products for a range of applications and undertaking product stability trials. ATTORI has also commissioned a number of clinical trials to investigate the efficacy of the formulations in a range of indications.

ATTORI has established a 100 ha irrigated plantation research site, being an effluent re-use project. The plantation is intended to be a pilot project or demonstration site and act as a model for further applications in effluent re-use.

The Institute is also undertaking investigations into other natural plant products of commercial interest. The organisation has established close working links with other Australian institutions including the Centre for Plant Conservation Genetics and the Centre for Phytochemistry located at Southern Cross University. ATTORI has an impressive suite of high-tech analytical equipment and can provide analytical services to individuals and organisations wishing to investigate the properties of virtually any essential oils and other plant materials.

Detailed information on ATTORI and the services provided by the Institute can be found by visiting the ATTORI website:
http://www.scu.edu.au/research/attori/

The Industry is supported by both the Australian Tea Tree Industry Association (ATTIA) Ltd and the rural Industries Research and Development Corporation (RIRDC). ATTIA and RIRDC have supported an industry R&D Program in cooperation with New South Wales Agriculture and the Queensland Department of Primary Industries.

Farmers are frequently confronted with exciting new agricultural opportunities to consider. The potential to ‘get rich quick’ is a strong lure and a real trap to unwary players. Tea tree plantations are derived from seed. Seed is obtained almost exclusively from native parent trees. Seed is very variable in terms of viability, the quality of oil that will be produced from the seedlings and the price.

It is possible to buy seed that will produce seedlings that will in turn produce oil that does not meet the Australian Standard and is therefore unmarketable. As the trees are in the ground for a long time (some plantations are approaching 20 years of age) it is essential that quality seed is obtained from a reputable supplier and grown by an experienced nursery. Seedlings can be produced en-masse for around 10 cents each. As with any perennial crop, site preparation is essential for successful plantation establishment and seedlings will need to be watered-in at time of planting. The importance of weed control cannot be over-emphasised.

Prior to entering into the growing of tea trees, it would be wise to investigate methods of distillation, the potential for a local cooperative distillation facility and the real market opportunities available to new producers. A current surplus in supply has produced a situation where some growers are experiencing real difficulty in finding a buyer for their oil.

Tea tree oil production offers potentially very high returns but the need to thoroughly plan and research the initiation of a plantation and the on-going management and marketing requirements is paramount.

Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email: r.fletcher@mailbox.uq.edu.au

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originally created by: GK; latest update 17 October 2001 by: RF