Agarwood is the most expensive raw material in the world. It costs $ 100k for one kilogram of wood. And its essential oil is dubbed ‘liquid gold’. It is sold at $ 80k per liter.

Why is the agarwood so costly? How has it come to be associated with luxury and wealth? And do you know that agarwood is produced only when the tree bearing it gets infected with mold?

What is agarwood?

Agarwood is the most expensive raw material found on earth. It is also called the Woods of the Gods or the Heavenly Wood. It is acquired from a tree called Aquilaria malaccensis which is native to the rainforests of Southeast Asia such as Vietnam.

When the tree is healthy, its heartwood is pale, odorless, and worthless. But when the tree is damaged due to external forces such as ants, and grazing animals, a specific fungus (Phialophora parasitica) starts growing on it. In response to this attack on its body, the tree starts secreting an aromatic resin called aloes. This is initially dark and moist, but after it gets embedded into the heartwood, it becomes agarwood.

The scarcity of the natural form of this wood

Only 2% of the Aquilaria tree gets naturally infected with the fungus. And there is poaching and the production is unsustainable. All this has contributed to the species being endangered. Its availability has dropped by 80% in the last 150 years.

Besides, it needs an experienced woodsman to pick up the tree that has natural agarwood inside it. The areas where it grows are dangerous and sometimes, lives are lost in the forest due to bad conditions or wild animals.

Additionally, it needs a lot of effort to separate agarwood from the healthy Aquilaria wood around it. This painstaking job may require many hours. But the experienced woodsman carves resin-infused chips called oud with hand.

Due to all this, the wood is extremely costly. It has been associated with wealth and luxury and may be called ‘the celebrity wood’. It has allegedly heavenly links and this too makes it expensive.

The uses and value of the wood

The resin-infused chips called oud are used as incense in most cultures. They are burnt as a mark of hospitality and also used on garments as a perfume. When burnt, there is firstly smoke followed by a musky sweet aroma. The essential oil can be obtained by distillation from oud. It is called ‘liquid gold’ because its cost can be as high as $ 80k per liter. It is part of high-value fragrances.

Due to its scarcity, Alquilaria wood is now artificially infected and this agarwood obtained is less costly.

The global market for agarwood is roughly $ 32 billion now. It is expected that this will double in the next nine years by 2029. The low availability and high demand for the product have made the cost go higher.

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