Why Invest in Agarwood
Agarwood can either be cut into wood chips for aromatic burning or “oud oil” can be extracted from the heartwood via the process of distillation. Because of the scarcity of the aquilaria tree, oud oil distilled from agarwood can cost up to $50,000 per litre and agarwood chips cost from anywhere between £20 per kilo up to £6,000 per kilo, depending on resin content.
Oud is considered as a supreme fragrance in the Gulf countries and is burned as a mark of respect and hospitality and is a traditional gesture of welcoming and honouring guests. In fact, Oud is considered an important feature at most social occasions. It is also used in teh Far East for both curative and religious reason; the Japanese donate flowers and oud oil to Shinto-Buddhist temples, and it is also widely used in by faith healers in both Japan and China
Oud is becoming more and more popular with the fragrance houses and perfume industry in the West. There has been a wave of new perfumes containing oud over the last twenty years released by popular fashion brands and to name but a few, Calvin Klein Obsession (1987), Nina Ricci (1995), Yves Saint Laurent (2002), Tom Ford Oud Wood (2007), Juicy Couture (2008), Dior Fahrenheit Absolute (2009) plus countless other luxury boutique and niche brands that are actively promoting “oud” as not just an ingredient but as a the product name.
Agarwood is valued in many cultures for its distinctive fragrance and in particular in the Middle East where it is one of the most sought after, almost priceless commodities,. The value of agarwood exported from Singapore has been estimated to exceed $1.2 bn per annum and the commodity is traded thoughout the Middle East as well as throughout Asia and Africa. It is widely used by most of the worlds leading fragrance and cosmetic companies and its market demand if supplied from “guaranteed” sustainable plantations is set to outstrip supply for at least the next decade. Sustainably sourced oud oil will fetch a premium in the open market.
Unlike Teak, most of the agarwood supply still comes from illegal felling of natural reserves. The value of agarwood market is therefore difficult to quantify, although various independent market analyses range the current global market demand between USD $5 - $10 billion annually.
