Description
Agarwood Chips Market Overview
The agarwood chips market is witnessing significant growth, primarily driven by the rising global demand for luxury fragrances and natural wellness products. Agarwood, commonly referred to as oud, is a highly valued aromatic resin utilized in premium perfumes, incense, and traditional medicine. Its distinctive and intricate scent has rendered it a coveted ingredient in affluent markets, especially in North America, the Middle East, and Asia. A prominent trend within the industry is the transition towards sustainable and ethical sourcing.
In light of concerns regarding the overharvesting of wild agarwood trees, there is an increasing focus on plantation-based cultivation and advanced inoculation methods. This approach guarantees a more dependable and environmentally responsible supply chain. The market is also expanding beyond conventional applications, with innovative products such as agarwood-infused cosmetics and aromatherapy items coming to the forefront. The growth of e-commerce has further broadened the market’s reach, rendering these rare products more accessible to a larger consumer audience.
The global Agarwood Chips Market size was valued at US$ 42.82 Billion in 2025 and is poised to grow from US$ 43.82 Billion in 2026 to 71.67 Billion by 2033, growing at a CAGR of 7.5% in the forecast period (2026-2033)
Agarwood Chips Market Impact on Industry
Fragrance and Incense Industry: The most significant effect is observed in the luxury fragrance and incense markets. High-quality agarwood chips are a highly sought-after and often indispensable component in premium perfumes and incense, valued for their intricate, rich, and enduring scent. This trend has prompted a substantial movement towards natural and sustainable ingredients in luxury perfumery, as consumers increasingly favor genuine, plant-derived fragrances. The considerable worth of agarwood has also established it as a symbol of status, particularly in the Middle East, further enhancing demand and stimulating market growth.
Wellness and Traditional Medicine: The expansion of the market is also having a profound effect on the wellness and traditional medicine sectors. For centuries, agarwood has been utilized in traditional Chinese, Ayurvedic, and Unani medicine for its healing properties, which include stress alleviation, anti-inflammatory benefits, and various other health advantages. The rising consumer awareness regarding natural and alternative health remedies is resulting in a greater incorporation of agarwood-infused products in aromatherapy, essential oils, and other wellness-related applications.
Sustainable and Ethical Sourcing: A significant consequence of the market is the heightened emphasis on sustainability and ethical sourcing practices. In light of a history marked by the overharvesting of wild agarwood trees, which has resulted in numerous species being classified as endangered, the industry is transitioning towards more responsible methods. This shift encompasses the widespread implementation of plantation-based cultivation and innovative inoculation techniques to stimulate resin production in cultivated trees. Such practices not only guarantee a more dependable supply but also resonate with an expanding demographic of environmentally aware consumers, thereby influencing global trade regulations and supply chain management.
Global Trade and E-commerce: The expansion of the market is transforming global trade. Although Southeast Asia continues to be a key supplier, and the Middle East a significant consumer, the growth of e-commerce has rendered agarwood products more available to a worldwide audience. This development has dismantled conventional geographical limitations, enabling smaller producers to connect with a broader customer base and aiding in the overall market growth in areas such as North America and Europe.
Agarwood Chips Market Dynamics:
Agarwood Chips Market Drivers
The Agarwood Chips Market is fundamentally driven by the profound cultural and religious importance of agarwood in the Middle East and Asia. Agarwood is widely used in religious ceremonies, traditional medicine, and cultural rituals, creating a persistent, essential demand that surpasses economic fluctuations. This demand is further heightened by the luxury and aspirational allure of its unique, rich fragrance, which establishes agarwood as a prestigious raw material in the global luxury fragrance and incense markets. The strong connection of agarwood with exclusivity and tradition motivates consumers, especially in the Middle East and East Asia, to continue making high-value purchases. The growing interest in natural and holistic wellness and aromatherapy is generating new demand, as consumers increasingly seek products like agarwood for its purported therapeutic benefits, including its calming and stress-relieving effects.
Challenges
A significant limitation on the market is the inherent scarcity and overexploitation of this natural resource. Agarwood forms in the Aquilaria tree only through a rare, years-long process of natural infection or injury, resulting in an extremely limited supply of wild, high-grade chips. This depletion of resources has led to illegal logging and poaching, which not only disrupts the supply but also endangers the remaining wild species. As a result, the market faces challenges related to authenticity and standardization. The quality of agarwood chips varies greatly depending on origin, age, and resin concentration; however, the absence of a universally recognized grading system complicates the ability of buyers to determine genuine value and for sellers to maintain consistent pricing, often resulting in market confusion and uncertainty for both consumers and traders.
Opportunities
The most substantial opportunity exists in the rapid advancement of sustainable plantation and cultivation techniques. By effectively executing and expanding artificial inoculation methods on cultivated Aquilaria trees, producers can establish a dependable, ethical, and uniform source of agarwood chips. This strategy tackles the fundamental issue of scarcity and contributes to market stabilization. There is also a significant opportunity to broaden product applications within the cosmetics and personal care industries. In addition to conventional incense and oil production, the distinctive characteristics of agarwood can be utilized in premium soaps, specialized skincare items, and various wellness products. The increasing influence of e-commerce platforms and niche digital marketplaces offers a distinctive avenue to link small and artisanal producers directly with global luxury consumers, enhancing market accessibility and price transparency, while effectively addressing the niche demand for ethically sourced, high-quality goods.
Agarwood Chips Market Key Players: –
- Thien Phu agarwood Co.,Ltd
- Asia Plantation Capital Pte Ltd.
- Ori Oud Asia
- ASSAM AROMAS
- Sadaharitha plantations limited
- Green Agro
- Homegrown Concept Sdn Bhd (HGC)
- THE MJI GROUP,
- Sai Export India
- Kamil Swarga Woods Ltd
- THE WESTWOOD GROUP
- Grandawood Agarwood Australia
- Binh Nghia Agarwood Co., Ltd
- Hoang Giang Agarwood Ltd.
- Aalam Ul Oud
- KAB Industries
- Duy Hai AGARWOOD.
- Thai Borai Agarwood Co.,Ltd.
- KANHA AROMA
Recent Development:-
4 September-2025 Hoang Giang Agarwood Ltd. HAGA Gold Tiger: A favorite in a demanding market, Saudi Arabia is renowned for its rich cultural heritage and a deep, historical appreciation for Oud. This translates into a highly discerning market where quality is not merely desired but demanded. Consumers in the GCC region possess sophisticated palates and an intimate knowledge of what constitutes truly exceptional Oud. The fact that HAGA Gold Tiger has not only entered but flourished in this challenging environment speaks volumes about its intrinsic value. Our success is tangible: we have imported tons of HAGA Gold Tiger into Saudi Arabia, consistently meeting and exceeding customer expectations. The sustained demand is a clear indicator that this product has become a true favorite.
September 24, 2025 Grandawood Agarwood Australia, In Australia, Indigenous peoples used wood incense in spiritual ceremonies to cleanse, to protect, and to mark the passage of time. In the Andes, people still burn palo santo. In Asia, including China, Malaysia, India, Japan, Singapore, Thailand, and Vietnam, incense sticks are part of daily worship. The practice has been fulfilled for centuries, passing from hand to hand, flame to flame.
Agarwood Chips Market Regional Analysis: –
The leading region in terms of current revenue market share is consistently recognized as North America, which frequently represents over 40% of the global Agarwood Chip market revenue. This financial supremacy is not attributed to traditional or religious applications, but rather to the region’s significant demand for premium and niche luxury products, especially in the high-end fragrance industry. Agarwood, also referred to as Oud, is a highly sought-after, exotic component in luxurious perfumes, perfectly aligning with North American consumers’ readiness to invest considerably in premium, natural, and distinctive aromatic offerings. The market expansion in this area is considerable, with a projected CAGR for North America typically hovering around 7.6% or more, bolstered by the rising popularity of aromatherapy, holistic wellness practices, and the ongoing introduction of agarwood-infused cosmetics and personal care products into a receptive and affluent consumer demographic.
Regarding cultural importance and foundational consumption, the Middle East sustains an exceptionally high-value, concentrated market, even though it is often categorized within the MEA region. The Middle East possesses an ancient, deeply rooted cultural and religious necessity for Agarwood chips (Oud), which are utilized as incense (Bakhour) in everyday life, during religious ceremonies, and as a representation of hospitality and wealth. Nations such as the UAE and Saudi Arabia serve as major re-export and consumer centers, with demand propelled by high per capita expenditure on luxury items and traditional customs. While its percentage CAGR remains competitive, the actual value of per-unit consumption is remarkably elevated, with demand heavily concentrated on the rarest and most costly grades of chips for direct burning. This region also functions as a vital intermediary in the global supply chain, acquiring chips from Southeast Asia and refining them into high-end oils for international markets.
The Asia-Pacific (APAC) region serves a dual purpose: it stands as the leading global production hub (with nations such as Vietnam, Indonesia, and India being prominent exporters) while also being projected to be the Fastest Growing Region in terms of consumption CAGR, often estimated to be between 7.5% and 8.5%. This swift growth rate is driven by two primary factors. Firstly, the region has a long-standing tradition of consumption, with agarwood being widely utilized in traditional Chinese medicine (TCM), Japanese incense practices, and religious ceremonies throughout South Asia, which guarantees a substantial and stable demand volume. Secondly, as the middle class expands, there is a resurgence of cultural appreciation and an increasing luxury market for high-quality domestic agarwood products, moving away from less expensive alternatives. This rise in local, high-value consumption, along with the ongoing need to supply the North American and Middle Eastern markets, positions APAC as the most vibrant region where production, traditional consumption, and modern luxury adoption converge.
The European market signifies a mature yet expanding segment, with its CAGR generally aligning closely with the global average. Growth in Europe is primarily propelled by the luxury fragrance sector, reflecting the trends seen in North America but with an additional focus on sustainability and ethical sourcing. European consumers and manufacturers highly value the assurance that agarwood chips are sourced from legal, sustainable plantations rather than from illegal logging, which fosters investment in certified supply chains. The market’s growth is contingent upon the sustained popularity of Oud as a fragrance note in Parisian and Italian perfumery houses, alongside the increasing consumer interest in natural aromatherapy products.
Agarwood Chips Market Segmentation:
Types
- Organic
- Conventional
Application
- Oil Production
- Incense and Fragrances
- Incense Sticks
- Perfumes
- Traditional Medicine and Wellness
- Retail/Household
- Cosmetics and Personal Care
Region
- Middle East and Africa (MEA)
- Asia Pacific
- North America
- Europe
- Latin America
