1.2 Global and local market for agarwood (chips, oil, resin)

Global Agarwood Market Overview

Market Size & Growth

  • The global agarwood (oud) industry is a multi-billion dollar market with strong projected growth:
    • ~USD 14.2 B (2025) and forecasted to USD 22–25 B by 2030 (CAGR ~6.8–8.2%).
    • Other reports suggest total market potential for agarwood chips alone could reach USD ~85 B by 2034 at ~7.5% CAGR.
    • Agarwood essential oil specifically is estimated to grow from approx. USD 324 M (2024) to ~USD 523 M by 2033 (CAGR ~5.5%).

Primary Demand Drivers

  1. Luxury Perfumery – Oud oils are used in high-end fragrances worldwide.
  2. Traditional & Cultural Uses – Incense, rituals, and ceremonial burning in Middle East & Asia.
  3. Wellness & Aromatherapy – Natural oils in spa/wellness and “clean beauty” markets.
  4. Traditional Medicine – In TCM, Ayurveda, and other cultural healing systems.

Regional Demand Patterns

  • Middle East & GCC — Largest consumer of oud wood and oil; deep cultural use, luxury gifting, and religious ceremonies drive high prices.
  • East & Southeast Asia — Strong demand in China, Japan, Korea for incense, carvings, and ritual uses.
  • Europe & North America — Growing niche markets in luxury perfumery and ethical natural products.
  • Asia-Pacific continues to dominate production, supplying most chips and oil globally.

Product Markets & Pricing

Agarwood Chips

  • Chips are the traditional raw material for incense and also a feedstock for oil extraction.
  • Market pricing (2025 estimates): ~USD 3,000–15,000 per kg depending on grade/resin content, with projected growth toward USD 3,800–18,000/kg by 2030.
  • Premium wild or highly resinous chips can fetch far higher prices in select markets.

Agarwood Oil (Oud Oil)

  • Oud oil commands some of the highest prices of all essential oils due to rarity and extraction complexity.
  • Pure distillate oils are valued roughly USD 12,000–40,000+/kg, with projections to USD 14,000–48,000/kg by 2030.
  • Market growth is driven by fragrance houses and wellness sectors globally.

Other Value-Added Products

  • Beads, carvings, powders — often add significant retail value.
  • Finished perfumes and incense products can multiply the raw material value many times over.

Local (Philippine) Agarwood Market

Emerging Domestic Sector

  • The Philippines is a growing supplier of plantation-based agarwood, with legal cultivation replacing illegal wild harvesting.
  • Prices in the Philippine context vary widely depending on quality and certification: roughly ₱15,000–₱120,000 per kg (~USD 300–2,400/kg) for cultivated chips.
  • Higher value is placed on authenticated materials with proper documentation and CITES compliance.

Challenges & Opportunities

  • Regulatory compliance (DENR, CITES) is required for legal trade.
  • Domestic prices are lower than premium producer markets (e.g., Vietnam/Malaysia), but improving quality may close gaps.
  • The domestic consumer base includes cultural uses, niche perfumery, and a growing interest in plantation traceability.

Market Dynamics & Trends

Supply Constraints

  • Only a small fraction of Aquilaria trees produce usable resin naturally, making sustainable cultivation and inoculation technology critical to expanding legal supply.

Shift to Cultivated Supply

  • Plantation-based agarwood is increasingly preferred due to sustainability, traceability, and legal compliance under CITES.

Premium & Traceability Trends

  • Products with blockchain or sustainability certification can command 15–25% price premiums.
  • Ethical sourcing and eco-friendly branding align with consumer preferences in Western markets.

Illicit Trade Risks

  • Illegal harvesting and trade still occur and can distort prices and supply chains. Legal, certified production is increasingly crucial for export access.

Key Takeaways for Learners / Investors

✅ Agarwood is a large and expanding global market across chips, oil, and value-added products.
✅ Price premiums are driven by resin content, source traceability, and legal compliance.
✅ Middle East & Asia remain the largest buyers, with growing markets in Europe & North America.
✅ Sustainable plantation supply is increasingly important for legal trade and long-term industry growth.