The terpinen-4-ol type of tea tree oil [ISO standard 4730:2004, Oil of Melaleuca; Terpinen-4-ol type (tea tree oil)] is a rare example of a transformation from a minor to a very significant volume item of international trade. Large-scale production commenced in Australia during the 1980s and recent international consumption of the oil has been estimated as 300-400 tons annually. While production has developed subsequently elsewhere in the world, Australia holds about 99 percent of the tea tree oil market today and is regarded as the benchmark supplier for quality.
Commercial development of the terpinen- 4-ol type of tea tree oil was started in Guangxi Province, P.R. China in the mid-1990s. However, poor selection of planting material and other factors in this initial development phase led to the offering of an oil of indifferent quality to the world market.
In 1998, the Guangxi Forestry Research Institute (GFRI) initiated an R&D program to systematically improve the production technology for tea tree oil and its further processed derivatives. This involved examining and further refining the best practices of the Australian industry for the local conditions. Today, production of tea tree oil in Guangxi is 60-80 tons per annum, of which 40-50 tons of high quality oil (40-50 percent terpinen-4-ol and < 3 percent of 1,8-cineole) are produced by the GFRI from forestry plantations of selected planting stock.