Agarwood is reputed to be the most expensive wood in the world, fetching as much as $100,000 per kilogram of pure natural wood. Having said that, artificial and adulterated agarwood can also be treated to the point where impure product can be had for as little as $100 per kilo.
Why is agarwood expensive to this degree? Once you take a look at where the wood comes from, how it’s harvested and its supply and demand realities, the situation becomes much clearer.
How Is Real Agarwood Formed?
Agarwood comes from an aquilaria tree that has been infected with a fungus that darkens it and gives a fragrant smell. Agarwood is manually separated from regular aquilaria in a labor intensive manner. A low infection rate and yield, over harvesting and depletion of aquilaria trees has made it increasingly valuable as a result.
Global trade and harvest controls have been put in place to curtail commercialization and protect its survival but is it too late?
Let’s take a closer look at the process of why it’s so expensive, how agarwood develops and is made, and what it’s commonly used for.
Why Is Agarwood Expensive?
On its own, aquilaria is non-timber wood and relatively invaluable certainly compared to agarwood. Aquilaria is light in color, odorless and relatively plain. But agarwood is highly prized due to its color and scent and its suitability in a wide variety of applications. The problem is that agarwood has become difficult to find due to over harvesting and unsustainability.
Real Agarwood is expensive due to its rarity and the intricate process required for its formation. Agarwood is produced when certain species of Aquilaria trees undergo a natural defense response to fungal or bacterial infections, resulting in the production of resin-rich wood with a unique and captivating aroma. This process is unpredictable and can take decades to occur.
Additionally, the extraction of Agarwood involves skilled labor and specialized techniques to carefully harvest the resinous wood without damaging its quality. The high demand for Agarwood in the perfume, incense, and traditional medicine industries further drives up its price.
The combination of its rarity, labor-intensive extraction, and strong market demand contributes to the high cost of real Agarwood.
Why Is Agarwood Hard To Find?
It isn’t uncommon for agarwood harvesters to search rainforests for several weeks at a time and come back empty handed, having found no agarwood to harvest. In the past, searchers would occasionally be killed by a wild animal in the rainforest while searching for agarwood, too.
In order to extract the agarwood from the aquilaria that they are able to find, a very labor intensive process must occur which adds to the cost of the wood. Resin-infused chips of agarwood called oud are manually carved out from regular aquilaria by hand which can take many hours to complete.
Over time, increased demand for agarwood along with unsustainable production and poaching have all contributed to a shortage of all types of aquilaria trees resulting in them being classified as critically endangered.
Market experts suggest that the current supply of agarwood only satisfies around 20% of demand
and that the global market size is said to be $32 billion. The market could climb as high as $64 billion by 2029 according to Business Insider magazine.
How Is Agarwood Created From The Aquilaria Tree?
Native to the rainforests of southeast Asia, agarwood comes from the inside of the aquilaria tree after it has been infected with the Phialophora parasitica fungus. On its own, the heartwood inside the aquilaria tree from which agarwood comes is on its relatively worthless and has no color or smell.
But when the aquilaria tree is infected with the fungus, its natural response is to release a protective stress-induced aromatic resin called aloes. You may also hear it referred to more generically as oleoresin. Aloes is dark and moist and over the next few years after infection, will embed itself throughout the wood to create agarwood. Aloes is what gives the agarwood its dark color, strong aroma and specific features that separate it from regular aquilaria.
The aquilaria tree is able to be infected by the fungus when it is damaged by an animal grazing, ant infestation or other external force. Without this happening, the wood inside the aquilaria tree remains just that: aquilaria wood.
So agarwood comes from aquilaria but only when infected by Phialophora parasitica. In aquilaria trees that don’t get infected, no agarwood is produced. It is said that experienced aquilaria tree growers and harvesters can look at and study an aquilaria tree and determine if it is likely to have developed agarwood inside.
Agarwood Facts And Characteristics
Here’s a table with 15 interesting and important characteristics of Agarwood trees and wood:
| Category | Characteristic |
|---|---|
| Scientific Name | Aquilaria spp. |
| Common Names | Agarwood, oud, aloeswood |
| Family | Thymelaeaceae |
| Origin | Southeast Asia, India, Bangladesh |
| Tree Height | Up to 20 meters (65 feet) |
| Wood Color | Dark brown to black |
| Wood Grain | Variable, often wavy or interlocked |
| Density | High |
| Durability | Highly durable |
| Workability | Challenging to work due to hardness |
| Uses | Perfume, incense, carvings, traditional medicine |
| Resistance | Resistant to decay and insects |
| Finishing | Takes a high polish |
| Sustainability | Often sourced from wild trees, some species are endangered |
| Availability | Limited due to scarcity and demand for resinous wood |
Why Is Agarwood So Rare?
Agarwood is only produced when Phialophora parasitica is present in an aquilaria tree so when no fungus exists and is able to spread, no agarwood is made. Add to the fact that the wood has been over harvested and its popularity has grown and you can see why the price is so high.
One additional problem is that the natural infection rate of aquilaria trees is very low. Some experts suggest that as few as 2% of aquilaria trees are properly infected to naturally produce agarwood. This increases the labor involved in agarwood production as it results in literally manually searching for aquilaria trees that can be harvested.
Another concern is that it can take years for the oleoresin to spread thoughout the aquilaria tree before it can be harvested. The older the resin, the more valuable it is.
As a result of its rarity, significant cultivation efforts particularly in Asia have resulted in mass plantations popping up to grow agarwood in earnest and to save the species from extinction. At the same time global efforts to monitor and control the trade and poaching of agarwood have also been brought into place which can also in part help to explain the expensive cost to purchase it.
Is All Agarwood Naturally Grown?
With the increased demand for agarwood coupled with the difficulty of locating new aquilaria trees and the low natural infection rate, growers have started manually infecting trees themselves to produce artificial agarwood.
Experts believe that aquilaria trees have decreased in number by up to 80% over the past 150 years due to over harvesting. As a result, agarwood is increasingly hard to find and further helps to explain the high cost.
So the concept of producing artificial agarwood by manually infecting trees has become common. Growers will drill holes in the aquilaria trees and add a microbial compound to create the infection process needed to produce agarwood. The result is artificially made agarwood but one that is not nearly as valuable as the natural variety.
It is said that natural agarwood can fetch up to 10x the price of artificially made product although with natural agarwood being so rare and demand outstripping supply, producers can often set their own price.
What Is Agarwood Good For?
It is said that King Louis XIV of France had his clothes and linens washed in water infused with agarwood. Samurai warriors are rumored to have burned agarwood smoke near their armor for good luck before battle. Many ancient cultures have written about using agarwood for its strong, pleasant scent.
The global agarwood market has traditionally been concentrated in the Middle East, Africa, East Asia, and South Asia and uses of agarwood goes back many centuries. Increasingly, agarwood is being used in commercial products in the west.
Agarwood and its components can be used in a number of ways as follows:
Incense: Agarwood chips can be lit and burned as incense, something that is popular in the Middle East.
Perfume: Agarwood chips can be burned and infused into clothing and other garments as a perfume.
Essential oil: Oud can be distilled into an essential oil. In its purest form, oud oil has been reported to cost as much as $80,000 per liter (33.8 fl oz.).
Fragrances: Popular fragrances that use oud oil include Oud Immmortel by Byredo, Oud Absolu from Yves St. Laurent, Her Majesty The Oud by Atkinsons and Oud Wood by Tom Ford among many others. They tend to have a warm and musky scent and may be infused with other fragrances including patchouli, cardamom and rosewood among others.
Finished products: Common examples of agarwood products include jewellery such as bracelets and charms and other products like pens, toothpicks, powder, bottled essential oil and miniature wood products.
Medicinal uses: Chinese medicine has long used agarwood for medicinal purposes as has Tibet, India and the Arab world. A wide variety of uses have been noted including against snakebite, rheumatism, vomiting, paralysis, gout and diarrhea. Modern research has indicated that agarwood essential oil has anticancer properties and supports its traditional use against inflammatory-associated diseases.
Natural vs Artificial Agarwood: How To Spot The Difference
How can you tell the difference between natural and artificial agarwood? Chances are you’re looking at artificial agarwood given the scarcity of the natural form but here’s what to look for.
| Natural agarwood | Artificial agarwood | |
| Look | Clear wood grain with a moderate dark color. | Light and porous and not as heavy as natural agarwood. Dark and shiny color. |
| Scent | Gentle and long lasting, the scent also spreads throughout a room. It is more subtle than artificial agarwood. | Not as fragrant or long lasting as natural agarwood. |
| Growth rate | Can take 10 – 20 years to be infected to the point where agarwood can be harvested. | Can be cultivated as soon as 2 – 3 years after infection. |
| Other | Natural agarwood feels heavy and coloring looks natural. Look for oil veins in the wood fibers. | When burned, artificial agarwood can irritate skin and eyes and produces more smoke than natural agarwood. |
Which Is The Best Agarwood?
In Vietnam, they claim that the Aquilaria Crassna is the best agarwood in the world. In China, they say its their Qinan (or Qi-Nan) agarwood that is the best. In the Philippines, it might be their Aquillaria apiculina agarwood. In other words it depends on who you ask.
There are 25 known species of aquilaria globally, only 19 of which produce resin when attacked by fungus.
Agarwood is native to India as well as Vietnam, the Philippines and Indonesia with other countries now growing it as well. The question of who produces the best agarwood is a common one for those who desire the highest quality product. It’s universally regarded that the natural agarwood market is far more desirable and can demand a far higher price than can the artificial market.
Having said that, the large gap currently between supply and demand means that even the artificial market is very healthy too.
Summary
Moving forward, the biggest concerns regarding agarwood are poaching and the sustainability of the aquilaria tree. Growers have already seen the proliferation in artificial agarwood to meet the growing demand, a demand which even currently can’t be met with only natural agarwood.
Given the scarcity of aquilaria, low infection rate, low yield, high labor required to produce it and the expected growth in demand, the global taste for agarwood should continue to be very healthy as new markets become aware of its benefits.