What is Agarwood

Agarwood, Oud, Gaharu, Kalambak, Chen Hsiang or Chankrosna in Cambodian, are among the common traded names. It is an aromatic resinous/fragrant non-wood forest product (NWFP) and highly prized incense that is extremely rare, precious, sometimes referred to as "wood of god”, "black gold” and "golden tree” of Aquilaria. It has at least a 2,000 years history in the Middle East, China and Japan. High consumers demand, especially from Middle East and Asian markets, combined with decreasing supply from the wild due to indiscriminate felling of the trees has pushed prices progressively higher, with top grade agarwood can fetch over USD 20,000/kg in end-use markets (Barden et al., 2000; TRAFFIC Network, 2000). The source of agarwood is the Aquilaria tree, from the family Thymelaeaceae (Ding Hou, 1960). It is a light demanding tree species and usually occurs in sparsely primary and secondary forest and on ferralitic soils with shallow to moderately deep layers in Cambodia (Khorn, 2002; Lok et al., 1996; 2007). The flowers are white in color and sweetly scented. The tree is evergreen, grows up to about 40 m high and 60 cm in diameter.
There are about fifteen species of Aquilaria in the world and all reported to produce agarwood. Among the best agarwood producing species include A. malaccensis, A crassna, A. sinensis, A. grandiflora, A. hirta, A. rostrata, A. microcarpa, A. borneensis and A. beccariana (La Frankie, 1994). However, the Cambodian species, A. crassna is known to produce top quality agarwood and finest oil, with consumer’s preference from and among the Arabs, Europeans and Asians. The reasons are due to its pleasant, mild scented and the quality strong lasting oil it produced. Besides, its favorable geographical and ecological conditions also contribute to the best source for agarwood and oil among the producers countries. It has been reported that such high top grade resin agarwood here can fetch from about USD 800-15,000 per kilogram and are used mainly in the production of high quality cosmetics, medicine, fine arts and high value incense (Burkill, 1966).
With a scenario of diminishing supply from the wild and significant increased in demand, it is further envisaged that agarwood produced from Aquilaria plantation will play an importantrole in the future. Concerns over the status and trade of Agarwood has even led to the proposal to list all Aquilaria spp. in Appendix II of the Convention on International Trade of Endangered Species of Wild Flora and Fauna (CITES) whereby, the species may not necessary threatened with extinction but trade can be regulated to avoid any possible extinction. In this regard, there are ample opportunities to invest in Aquilaria plantation and related industry for agarwood production. Necessary technical expertise are now available and professional advice/researchers can be seek from both local and overseas such as from Forest Research Institute of Malaysia (FRIM), in order to quickly claim a substantive share of the industry and market development.
Agarwood is currently traded in large quantities, with exports from Indonesia and Malaysia taking the lead (CITES, 2001) and Malaysia export averaged at USD 21 million/year (±RM 73 million/year) (JPSM 2011). The current global market for agarwood is estimated to be in the range of USD 6-8 billion and is growing rapidly. These importing countries include Singapore, Taiwan, United Arab Emirates, China, Hong Kong, Vietnam and Saudi Arabia.

Written By Dr. Lok Eng Hai