Also known as oud or oudh, agarwood is a fragrant heartwood formed in the Aquilaria tree when it becomes infected with a specific type of mold or fungus. In response to the infection, the tree produces a dark, aromatic resin as a defense mechanism. This resin is extracted and distilled to produce agarwood oil. In essence, agarwood or oud oil is obtained through the hydro-distillation of infected wood. One of the recent discoveries stated that trees growing at higher elevations and in nutrient-poor soils tend to produce higher-grade agarwood more frequently. This is because trees under environmental stress are more prone to infection, which increases resin production. Agarwood is quite rare and expensive due to the specific conditions needed for its formation and the limited number of wild trees. Its rarity makes it a cultural, spiritual, and economic treasure. It is commonly found in Southeast Asia, including countries like India, Thailand, Vietnam, and Indonesia. Other names of agarwood are aloeswood, gharuwood, and eaglewood.
Agarwood has a long and rich history, with references found in the Indian Vedas, used in religious rituals in ancient Mesopotamia around 3000 BCE, revered in ancient Egyptian ceremonies, and even mentioned in the Hebrew Bible. During the 3rd century CE, agarwood became a valuable trade commodity between India, China, Arabia, and Southeast Asia. It was even exchanged like gold due to its weight-to-value ratio. Soon it became a prized possession of kings, emperors, and nobles because of its rarity and unique scent. Today, agarwood has become a staple in the luxury fragrance market, especially in the UAE and Gulf countries. It is valued around the world for its use in perfumery, spiritual practices, and traditional medicine. The growing demand for pure oud oil, especially from buyers in the Middle East, Southeast Asia, and Europe, has opened up new export opportunities.
For exporters and producers, the market for agarwood oil buyers and oud oil importers is niche but premium, with a strong focus on purity, origin, and sustainable factors. Understanding what drives demand can help suppliers looking to enter or expand in this segment.
We already know that garwood oil is not a single uniform product. Its quality, origin, and extraction method affect pricing and buyer demand. Here are the different types and grades of agarwood oud oil that every exporter should be aware of to meet specific market demands.
Different Types of Agarwood Oil
Different Grades of Agarwood Oil
Many agarwood oud oil buyers often seek suppliers or exporters with diversified offerings, allowing them to buy related products in one shipment and save on import costs. As a result, dealing in related categories enables suppliers to optimize logistics and also tap into overlapping buyer networks. Here are some complementary product categories you can explore.
Undeniably, it is important to stay updated on global market trends and insights for your commodity to spot new opportunities and grow your export business. This helps you make smarter decisions and get a competitive edge. Here are key insights you should know.
Global Agarwood Essential Oil Market Size:
Source: Fact. MR
Top Agarwood Oil Importers Worldwide:
Source: Volza
Agarwood Oil Price Per Kg:
Source: THIEN MOC HUONG
Important Note:
You should know that the export of agarwood from India is strictly controlled. You can legally export only from registered cultivated sources. Also, you need to meet the full set of DGFT and CITES requirements. However, wild-source agarwood exports are banned with zero allocation.
Here are the most effective methods to find and connect with agarwood oil wholesale buyers or agarwood oud oil importers.
1. What are the main concerns related to agarwood export in India?
Agarwood exports in India are regulated under CITES Appendix II, requiring proof of sustainable sourcing and licenses. It is due to major concerns such as illegal harvesting, smuggling, and depletion of wild populations.
2. How can agarwood be sourced sustainably?
You can source agarwood sustainability by using artificial inoculation (physical, chemical, or biological) in plantation-grown Aquilaria, and harvesting only from cultivated, registered farms. It is important to note that wild harvesting from protected forests is strictly prohibited.
3. Where is agarwood/oud oil exported to from India?
Agarwood/ oud oil is majorly exported to Saudi Arabia, the United States, Qatar, Kuwait, Sri Lanka, Singapore, Thailand, Hong Kong, the UK, and Australia.
4. What are the main uses of agarwood/oud oil?
Agarwood oil has a range of applications. It is mainly used in:
5. What are the annual export quotas for agarwood and agarwood oil from India?
The annual export quota for agarwood chips and powder from India is 151,080 kg, and for agarwood oil, it is 7,050 kg. Remember that these quotas are applicable from 2024 to 2027 and apply to products derived from artificially propagated sources.
6. What documentation is required for agarwood oil export?
The documentation required for agarwood oil export includes:
7. From which states in India is agarwood and agarwood oil export permitted?
Agarwood and agarwood oil exports are allowed from Assam, Tripura, Manipur, Nagaland, Karnataka, Meghalaya, Kerala, with specified state-wise quotas, along with limited allocation from “Others”.
8. What are the consequences of violating agarwood export regulations?
Illegal harvesting or export without permits risks seizures (India seized over 1.25 tonnes of chips and 6?L of oil between 2017 and 2021), legal action, and blacklisting under CITES. Consequences of violating agarwood export regulations include fines, license revocation, and trade restrictions.
9. What is the main export market of agarwood?
The main export markets of agarwood are:
10. Which country has the best agarwood oil?
Vietnam is often considered to have the best agarwood oil, particularly its Kyara or Kynam grade. It is followed by Cambodia, Thailand, India, and Malaysia.
11. Who is the biggest importer of oud oil?
India is the biggest agarwood oil importer, followed by Saudi Arabia and Vietnam.
12. Which tree makes oud?
Oud is produced by trees in the Aquilaria genus and some Gyrinops species, when infected or artificially inoculated.
13. What is injected in agarwood?
To stimulate agarwood formation, various substances like fungi, chemicals, and natural products are injected into the Aquilaria tree.
14. How to identify fake agarwood?
To identify fake agarwood, focus on its scent, texture, color, and burning behavior. Real agarwood has a natural, pleasant, and long-lasting fragrance, while fake ones might have a strong, artificial, or short-lived scent. Also, look for natural textures, patterns, and imperfections in real agarwood beads or chips, as fake ones often appear too perfect.
15. What is agarwood oil HSN code?
33013010 is the agarwood oil HSN code.
