Wood from the Agar tree used to make the perfume ingredient oudGetty ImagesMore Images(2)AdsOud comes from the wood of the tropical Agar (Aquilaria) tree,ud comes from the wood of the tropical Agar (Aquilaria) tree, believed to have originated in the Assam region of India, and from there spread throughout Southeast Asia. When the wood of this tree gets infected with a certain mould variety (Phialophora parasitica), it reacts by producing a precious, dark and fragrant resin, which is the perfume ingredient oud (also called agarwood).What It Smells LikeOud (in Arabian oudh) is highly valued by perfumers for its sweet, woody, aromatic and complex scent. It is used in forms of oud oil (dehn al oud) or raisin (oud mubakhar). The oil of oud, whether extracted by distillation from wood, or by melting the raisin, is non-irritating and can be applied directly on the skin, or added in a perfume composition, most often as a base note.Liquid GoldDue to its rarity, high demand, and the difficulty of harvesting it, oud oil is perhaps the most expensive oil in the world. Its value is estimated as 1.5 times of the value of gold, and it is sometimes referred to as 'liquid gold'.Oud Perfumes to TryLong prized as a perfume ingredient in the Middle East and Europe, oud has recently made great gains in popularity in the West. Oud plays a starring role in several North American perfumes for women, including Pure Oud Eau by Killian, Oud Intense by Comptoir Sud Pacifique, Midnight Oud Eau de Parfum by Juliette Has a Gun, and Bond No. 9 New York Oud. It is also used in Sensuous by Estee Lauder, Twilight Woods by Bath & Body Works, Amouage Epic Woman by Amouage, and Daphne by Comme de Garcons.AGARWOODAgarwood is a resinous substance occurring in trees of the genusAquilaria(a member of the Thymelaeceae family), a fast-growing forest tree which can be found growing from the foothills of the Himalayas to the rain forests of Papua New Guinea. Outside its native habitat, agarwood is best known in the Near East and Japan.The most important resin-producing species ofAquilariaare A. agollocha, A. malaccensisandA. crassna.A. malaccensisis protected worldwide under the (CITES) convention. A.crassnais listed as an endangered species by the Vietnamese Government.Agarwood has been used for centuries as incense, for medicinal purposes and in perfumery.First-grade agarwood is one of the most expensive natural raw materials in the world, with prices in consumer countries ranging from a few dollarsper kilogram for very low quality material to more than US$30 000 per kilogram for top quality wood. Agarwood oil fetches similarly high prices. (Source:Agarwood Wood of Gods International Conference.)

Agarwood is a one of the most valuable minor forest products of the Southeast Asian tropical forests. In Viet Nam, agarwood is produced from the heartwood of rarely available naturalAquilaria crassnatrees. In the authors fieldwork in Viet Nam, a naturalA. crassnawas found in Khanh Hoa province. Information on agarwood exploitation and production was gathered by interviewing local people. The results showed that some of the local people earn their living through agarwood production, but owing to overexploitation the natural resource for this valuable plant has declined dramatically in the past decades, while the demand for the resource remains constant or even increases. The cultivation ofA. crassnahas started in several places in the country as an initiative for conserving this endangered but economically important plant species. (Source:Quan-Le-Tran, Qui-Kim-Tran, Kouda-K, Nhan-Trung-Nguyen, Maruyama-Y, Saiki-I & Kadota-S. 2003. A survey on agarwood in Vietnam.Journal of Traditional Medicines,20(3): 124131.)For more information, please contact:Institute of Natural Medicine, Toyama Medical and Pharmaceutical University, 2630 Sugitani, Toyama 930-0194, Japan.

Agarwood Market Demand

The consumer market for Agarwood is well developed in the Middle East and Northeast Asia where Agarwood has been used for over one thousand years. Taiwan, Singapore, Hong Kong and Bangkok are major traders of Agarwood while Thailand, Indonesia, Vietnam and Malaysia are major producers. The increasing scarcity of illegal forest Agarwood makes plantation grown Agarwood much sought after to meet global demand.

Taiwan Market Demand

Taiwan has long been a major trader in Agarwood for both medicinal and cultural uses. According to official records, 6,843 tonnes of unprocessed Agarwood was imported to Taiwan in the ten years to 2003. Prices of Agarwood for medicinal use vary between US$ 3,000 to US$ 30,000 per kilogram and processed oil between US$ 7,000 to US$ 61,000 a litre. Large high quality pieces suitable for ornamental sculptures can sell for up to US$ 100,000 per kilogram.

Japan Market Demand

In Osaka, Japan, a shop known as Jinkoh-ya (literally, Agarwood Store) has been trading Agarwood products for over 350 years. During the period 1991-1998, according to official Customs figures, 277,396 kilograms of unprocessed Agarwood was imported into Japan, or an average of over 34 tonnes a year. A 2004 price survey of unprocessed Agarwood pieces found prices ranging from US$ 320 to US$ 22,700 per kilogram with the highest grades selling for between US$ 9,000 to US$ 272,000 per kilogram.

Middle East Market Demand

Demand for Agarwood products in the Middle East significantly exceeds Eastern Asia. One well known Saudi Arabian retailer specializing in oud (agar oil) has over 550 retail outlets across 17 countries with over 600,000 customers and is one of the worlds largest perfume retailers in a market worth US$ 3.3 billion a year. The company imports 45 tonnes of unprocessed Agarwood yearly to produce 400 different fragrances with oud as the basic ingredient and has a production capacity of 30 million bottles of perfume a year.

Sources:TRAFFIC: Trade Records and Analysis of Flora and Fauna In Commerce,IUCN: International Union for Conservation of Nature,CITES: Convention on International Trade in Endangered Species of Wild Fauna and Flora,IEST: Institute of Environmental Sciences and Technology

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Lao Agar Intl Development Company Ltd. is located in Dongkhamxang Village, Vientiane Province. The company was established to conduct business in agarwood and related products such as plantations, hardwood and agar oil extraction. It is the largest agarwood and finished products company in Southeast Asia. The oil is carefully extracted from the aquilaria mallaccensis trees that are grown in the companys own plantations in the Lao PDR. The extraction and filtering process is done with pure steam to remove all impurities, thus ensuring that the oil is non-chemical and has 99% purity. Agarwood oil is extremely rare and highly prized incense. By weight it is more expensive than gold. A survey has shown that supply meets only 40% of demand. L.A.I.D works jointly with STRI (Science and Technology Research Institute of the Lao PDR) to develop new technologies, establish new agarwood plantations and promote clean environmental practices.

The company has 200,000 trees in its plantations, with 45 boilers/distillers at its Vientiane factory. Number of people employed: 100