New Caledonia has banned the export of all forms of sandalwood to protect the resource and support local industries.
The decision has been prompted by what is being described as a dramatic loss of the resource which has generated about 12 million US dollars between 2010 and 2014.
The move has been welcomed by the head of a distillery on the island of Mare which has been supplying perfume manufacturers with resins and oils.
The company has replanted 40,000 trees as part of efforts to broaden the territory's economy.
AFP reports that dozens of tonnes of sandalwood had been exported outside quotas by businesspeople from Vanuatu to China, Dubai and Africa.