Industry: Consumer Goods
Delivery Timelines: Please Contact Sales
Published Date: October-2024
Format: PPT*, PDF, EXCEL
Number of Pages: 175
ID: PMRREP29233
The agarwood chips market is estimated to increase from US$41.05 Bn in 2024 to US$67.45 Bn by 2031. The market is projected to record a CAGR of 7.4% during the period from 2024 to 2031.
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 chips are gaining popularity in the aromatherapy and wellness sectors, with an increasing number of consumers seeking natural remedies for stress relief and relaxation. It is estimated that the annual production of agarwood, primarily sourced from the Aquilaria species, ranges between 1,000 to 3,000 metric tons depending on environmental factors and sustainable harvesting practices.
Increased awareness about the benefits of agarwood in traditional medicine and spiritual practices is surging the demand among consumers in various regions across the world.
Key Highlights of the Market
|
Market Attributes |
Key Insights |
|
Agarwood Chips Market Size (2024E) |
US$41.05 Bn |
|
Projected Market Value (2031F) |
US$67.45 Bn |
|
Global Market Growth Rate (CAGR 2024 to 2031) |
7.4% |
|
Historical Market Growth Rate (CAGR 2019 to 2023) |
6.7% |
|
Region |
Market Share in 2024 |
|
North America |
40% |
North America holds the notable share of the agarwood chip market and is projected to witness considerable growth during the forecast period. In recent years, the demand for agarwood chips, utilized in producing luxury perfumes and agarwood incense, has increased in North America. North America agarwood chips market is flourishing and seeing tremendous growth due to the emergence of new, premium, natural aromas such as agarwood.
North America market is experiencing an increase in niche brands and bespoke scents driven by evolving customer preferences and a growing demand for natural perfumes. Furthermore, consumers in North America today enjoy enhanced accessibility to agarwood chips owing to the expansion of internet retail platforms.
Nonetheless, challenges such as regulatory constraints and competition from artificial alternatives persist and influence market dynamics. Notwithstanding these challenges, the agarwood chip market in North America is anticipated to expand in the near future. Demand for agarwood chips in the United States is expected to reach a valuation of around US$5 Bn in 2024 and occupy over 95% of the North America 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, including personal care, cosmetics, and medicine formulation. Since agarwood finds significant utilization in the formulation of fragrances, it is likely to affect the demand for the same in Western markets with increasing awareness about it.
|
Category |
Market Share in 2024 |
|
Nature - Conventional |
70% |
Based on nature, the agarwood chips market is further classified into organic and conventional, where the conventional nature segment dominates the market. The conventional nature segment of the market is projected to comprise 70% of the market share, which is attributed for its compliance with traditional agriculture and processing techniques, which correspond with cultural rituals and religious ceremonies of historical importance.
Consumers may favour products designated as conventional due to a notion of authenticity and the belief that traditional procedures yield superior-quality agarwood chips. Conventional methods frequently include established protocols and a history of consistency, fostering a perception of dependability in the supply chain and appealing to both producers and customers.
Conventional techniques may be linked to a legacy of artisanal skill in agarwood cultivation and processing. Conventional agarwood cultivation methods may garner support and endorsement from cultural and religious organizations, enhancing their acceptance and demand in the agarwood chip market.
|
Category |
CAGR through 2031 |
|
End Use - Incense Sticks |
7% |
Based on end use, the market is further sub-segmented into incense sticks, fragrances, and retail/household, where the incense sticks segment dominates the market. Agarwood is known for its unique and fragrant characteristics. The distinctive and esteemed aroma of agarwood chips is greatly prized in incense stick manufacturing, enhancing the appeal of these items.
Agarwood is frequently linked to therapeutic and meditative attributes. Incorporating agarwood chips in incense sticks is associated with techniques like aromatherapy, which posits that the fragrance induces calming and soothing effects.
The awareness and interest in aromatherapy and holistic wellness have increased globally, which leads to the market's growth. Agarwood-infused incense sticks are in demand due to their ability to foster a serene atmosphere and promote the expansion of this market sector.
Agarwood is considered a luxury component, and incense sticks crafted from agarwood chips are frequently marketed as high-end items. The allure of luxury goods and distinctive scents can stimulate demand in high-end markets, aiding the market's growth.
Agarwood is among the costliest timbers globally due to its rarity and the arduous extraction method. Agarwood is classified as an endangered species by the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
Agarwood chips are little wood fragments derived from the Aquilaria tree. When incensed, the unique aroma produced by these chips renders them highly expensive. Agarwood is commercially exchanged in chips, oil, logs, and dust.
Agarwood chips maintain a consistent demand in the market due to their perceived health benefits and their application in traditional medicine, which is anticipated to drive market expansion. Agarwood products are highly sought after in regions with significant tourist activity, as they often attract visitors seeking authentic cultural experiences.
Agarwood chips are widely utilized in manufacturing agarwood oil, incense, perfumes, and traditional medicinal preparations. Agarwood has been used for ages across diverse cultures because of its aromatic qualities. It is particularly prevalent in traditional Middle Eastern, Indian, and Southeast Asian incense and fragrance.
The agarwood chips market has experienced significant growth, driven by rising demand in the fragrance, cosmetic, and therapeutic sectors. During the historical period from 2019 to 2023, the market witnessed a growth rate of 6.7%. Market growth during this period was fueled by the increasing popularity of agarwood in high-end perfumes and traditional incense, particularly in regions like Asia-Pacific. The market faced challenges from overharvesting and regulatory pressures due to sustainability concerns.
The agarwood tree, primarily sourced from the Aquilaria species, is classified as vulnerable by the IUCN, leading to strict regulations under CITES and impacting supply chains. The demand for sustainably sourced agarwood chips is anticipated to surge as consumers become environmentally conscious. Innovations in cultivation and harvesting practices will support sustainable supply.
The expansion of the aromatherapy and wellness sectors will further drive market growth as agarwood chips gain recognition for their therapeutic benefits. This trend toward sustainability and wellness will transform the agarwood chips market landscape in the coming years.
Cultural Demand from the UAE is Boosting the Agarwood Chips Market Growth
Agarwood is an important part of life in the UAE and 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 for 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 UAE's heritage and cultural identity. Thus, the continuous cultural demand for agarwood chips in the UAE is boosting the market for agarwood chips in the UAE.
Agarwood is the premium raw material used 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 expand the scope of use of agarwood in the different categories of the product.
The global supply of agarwood meets only a percentage of the global demand. The 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 the Middle East and South Asia, due to its immense popularity in the production of perfumes and incense. This factor is expected to increase the demand for agarwood steadily.
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. Perfume products include a high percentage of production and other costs and this results in a rise in the prices of agarwood chips on an annual basis.
Trade restrictions in India are the major cause of rising prices of agarwood chips as India is a prominent country with most of the importing countries trading for many years. In isolated cases, the 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.
Cultural and Religious Importance of Agarwood to Create a Pool of Opportunities
Agarwood has a lengthy application history in traditional medicinal systems, including Ayurveda in India, Traditional Chinese Medicine, and indigenous healing traditions in Southeast Asia.
The resin and oil derived from agarwood are thought to have therapeutic effects. It addresses diverse diseases, including gastrointestinal disorders, respiratory complications, and dermatological conditions. The integration of agarwood in traditional medicine exemplifies a holistic perspective on health and wellness that is strongly rooted in these cultures.
Agarwood plays a crucial role in cultural traditions and celebrations across numerous Asian countries. Its application might extend from creating traditional items and carvings to integrating them into cultural performances.
The scent of agarwood is linked to auspiciousness and is said to elevate the entire experience of cultural events and festivities. The cultural importance of agarwood is frequently transmitted throughout generations, sustaining its demand.
Agarwood possesses symbolic significance in numerous cultural and religious contexts. In certain traditions, it is seen as a symbol of prosperity, fortune, and heavenly favor. The resinous heartwood, produced by natural infection, is seen as a transformational element, reflecting the beauty that may emerge from adversity. The spiritual meaning linked to agarwood amplifies its allure in religious and cultural traditions.
The agarwood chips market is characterized by a competitive landscape comprising established players and emerging companies. Key market participants include Gaharu International, Oud & Co., Al Haramain Perfumes, and Ajmal Perfumes, which dominate the market due to their extensive product portfolios and strong brand presence in the fragrance indsutry.
Companies focus on sustainable sourcing and innovation, enhancing their market position. Additionally, Southeast Asia and the Middle East regional players are increasingly adopting eco-friendly practices to meet growing consumer demand for sustainable products.
The market is witnessing increased investments in cultivation and production technologies to ensure high-quality agarwood. Collaboration between suppliers and fragrance houses is also a significant trend, fostering product development and market expansion.
Recent Industry Developments in the Agarwood Chips Market
|
Attributes |
Details |
|
Forecast Period |
2024 to 2031 |
|
Historical Data Available for |
2019 to 2023 |
|
Market Analysis |
US$ Billion for Value |
|
Key Regions Covered |
|
|
Key Market Segments Covered |
|
|
Key Companies Profiled in the Report |
|
|
Report Coverage |
|
|
Customization & Pricing |
Available upon request |
By Nature
By End Use
By Distribution Channel
By Region
To know more about delivery timeline for this report Contact Sales
The market is estimated to be valued at US$67.45 Bn by 2031
The market is extensive and is valued at US$41.05 Bn in 2024.
Some of the key players in the market are Aalam Ul Oud, KAB Industries, and Duy Hai AGARWOOD.
North America region dominates the market for agarwood chips.
Huge demand from the fragrance industry is a key driving factor for the market growth.
