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Agarwood Chips Market Segmented By Organic, Conventional Nature in Ayurveda Medicines, Incense Sticks, Personal Care and Cosmetics
The global agarwood chips market expanded at 7.7% CAGR between 2018 and 2022 and ended up at a valuation of US$ 44,050.7 Million in 2023. As per this study by Persistence Market Research, the sales of agarwood chips across the world are estimated to increase at 7.1% CAGR to reach a market size of US$ 87,467.6 Million by the end of 2033.
The most expensive wood in the world, agarwood, also known as oud or aloeswood, is the dark and aromatic resin-suffused wood formed in the species of Aquilaria, Gyrinops, and Aetoxylon trees. Generally, Aquilaria is considered to be the leading producer of high-quality agarwood. Agarwood is formed when these trees are infected by a parasitic fungus. To combat this infection, the tree begins to secrete a very special and fragrant resin that slows down the growth of the fungus and ultimately heals the tree. This resin-soaked wood is agarwood.
| Attribute | Key Insights |
|---|---|
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Agarwood Chips Market Size (2023E) |
US$ 44,050.7 Million |
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Projected Market Value (2033F) |
US$ 87,467.6 Million |
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Global Market Growth Rate (2023 to 2033) |
7.1% CAGR |
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Historical Growth Rate (2018 to 2022) |
7.7% CAGR |
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Revenue Share of Top 4 Countries (2022E) |
57% |
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“Cultural Demand from the UAE is Boosting the Agarwood Chips Market Growth”
Agarwood is an important part of life in the UAE or in Arabic culture in general. People use high-grade agarwood chips and burn them to honor guests in Arabic countries. In addition, they have a tradition of perfuming personal garments before special occasions and in preparation of prayers. The high price of agarwood is considered an indicator of its preciousness and luxury. The quality of the aroma can be viewed as an indication of status and prestige.
Agarwood is seen as a part of the heritage and cultural identity of the UAE. Thus, the continuous cultural demand for agarwood chips in the UAE is boosting the market for agarwood chips in the UAE.
“Increasing Demand for Agarwood Chips in Fragrance Industry”
The global supply of agarwood meets only a percentage of the global demand. Bulk supply of agarwood is coming from South-East Asia as these countries are prominent producers of agarwood. The demand for agarwood is continuously increasing, especially in regions such as Middle East and South Asia due to its immense popularity in the production of perfumes and incense. This factor is expected to steadily increase the demand for agarwood.
“New Innovative Products from Agarwood”
Agarwood is the premium category of raw material in the production of perfumes and incense. Companies manufacturing products from agarwood are now introducing and offering innovative products in their product portfolio. This strategy is expected to increase the demand for agarwood in the market and it is expanding the scope of use of agarwood in the different categories of the product.
“Essential Raw Material for High-End Fragrance Products”
High-priced perfumes are famous for their distinctively sweet, aromatic, and complex scent. Agarwood is an essential ingredient used to manufacture high-end perfumes and fragrance products. Middle East is the largest consumer and manufacturer of perfumes and fragrances as it is used for personal and religious purposes. The demand and use of perfumes are expected to show steady growth and hence, the demand for agarwood in the manufacturing of high-end fragrance products as an essential ingredient is expected to show steady growth.
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Get a Customized Version“Price Fluctuations and Trade Restrictions Resulting in Mounting Prices of Agarwood Chips”
Most of the companies try to keep their products at stable prices to maintain the market niche. The fluctuations in import prices are always reflected in the retail prices of the end products. Agarwood oil and other agarwood-derived perfumes have been more stable than agarwood chips, since price fluctuation has a direct impact on raw materials, while perfume products include a high percentage of production and other costs. This all results in rise in the prices of agarwood chips on an annual basis.
The trade restrictions in India are the major cause of rising prices of agarwood chips as India is a prominent country with whom most of the importing countries are trading for many years. In isolated cases, global application of CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) is affecting the continuity of supply, which results in an increase in the prices of agarwood chips.
What Makes UAE a Lucrative Market for Manufacturers of Agarwood Chips?
“Cultural Use of Agarwood Chips in Arabic Countries”
UAE accounts for 35.4% of the Middle East and Africa agarwood chips market and is rapidly growing with demand slated to rise in the forecast duration at a value CAGR of 7.8%.
The high growth is prominently due to the deep cultural integration of agarwood and its products in the Middle Eastern region. With rapid development in the region, the high demand is expected to continue in the upcoming years.
What is the Demand Outlook for Agarwood Chips in the United States?
“Strong Presence of Prominent Market Players in the Country”
Demand for agarwood chips in the United States is expected to reach US$ 4,610.1 million in 2022 and occupy 95.4% of the North American market.
Key players have established a significant presence in the United States due to the growing demand for agarwood chips across various end-use sectors. These sectors include personal care and cosmetics, medicine formulation among others. Since agarwood finds significant utilization in the formulation of fragrances, it is likely to affect the demand of the same in western markets with increasing awareness about the same.
Where are Agarwood Chips Being Widely Utilized?
“Personal Care and Cosmetic Industry Contributing to Market Growth”
Agarwood chips are widely used in the personal care and cosmetics sector with the market share estimated to exceed 60.0% over the forecast duration. The use of agarwood chips in fragrances and perfumes will continue to drive the demand, based on the value CAGR of 7.0%.
What are the Different Agarwood Chips Available in the Market?
“Conventional Farming of Agarwood Chips to Dominate the Market in the Forecast Duration”
The global agarwood chips market is categorized based on the nature of cultivation, including organic and conventional. There is a wide disparity among the cultivators since conventional cultivation holds around 97.0% of the market and will experience a rapid value growth rate and CAGR is estimated at 7.1% during the forecast period. The cultivation of agarwood is a fairly complicated and time intensive on its own. To cultivate it organically would further result in driving up the cost of the product.
With the utilization of advanced and state-of-the-art manufacturing techniques, companies are focusing on offering high-quality standards and grades of agarwood chips. This trend is followed by many companies and they are introducing new and innovative products made from agarwood such as jewelry and accessories. Some companies are also offering products such as agarwood soap bar, tea & biscuits made from agarwood.
| Attribute | Details |
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Forecast Period |
2023 to 2033 |
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Historical Data Available for |
2018 to 2022 |
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Market Analysis |
US$ Million for Value |
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Key Regions Covered |
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Key Countries Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
Available upon Request |
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The global agarwood chips market is valued at US$ 44,050.7 million in 2023.
Consumption of agarwood chips increased at a CAGR of 7.7% from 2018 to 2022.
Worldwide demand for agarwood chips is estimated to reach US$ 87,467.6 million by 2033.
Global demand for agarwood chips is projected to increase at 7.1% CAGR from 2023 to 2033.
K.A.B. Industries, Po Luo Senko Agarwood, OudAsia, WEFIVE Group collectively account for 30% to 40% market share.
The market for agarwood chips in East Asia is forecasted to reach US$ 5,025.8 million by 2033.
The U.S., UAE, Kuwait, Saudi Arabia, and India lead as far as the consumption of agarwood chips is concerned.
