More needs to be done for the expensive agarwood

Unlike other plantations such as rubber and palm oil, agarwood has not received much support from the govt 

by AZALEA AZUAR / pic MUHD AMIN NAHARUL

WHEN hiking through the forest, we often notice our stress levels lowering and our mood and focus improving. 

This is one of the reasons that woody-scented perfumes are highly sought after. They make us feel like we are back in the green forest despite being surrounded by a concrete jungle. 

Among the most popular woody fragrances are rosewood, cedarwood, agarwood and sandalwood. They may be chilly and warm, hard and soft, rough and silky, rich and sparse, spicy and mineral, and so much more. 

These scents have the ability to suggest warm skin, hot days and finely-milled powders, overlapping with various scent families and blurring all gender distinctions. 

“The Wood of the Gods” 

Agarwood is a resinous heartwood that belongs to the genus Aquilaria and can only be found in South-East Asia (SE Asia). 

It thrives at elevations ranging from a few metres above sea level to around 1,000m, with 500m being optimal. 

Aquilaria may thrive in a variety of soil conditions including poor sandy soil, while its seedlings can develop as fast as four years despite requiring a lot of shade and water. 

However, only 15 of its species are known to produce the agarwood resin, which include Aquilaria “malaccensis” that is largely found in Thailand, Malaysia and Indonesia. Aquilaria “crassna” is found throughout Indochina. 

A variety of additional species, such as Aquilaria “grandfolia” and Aquilaria “chinesis”, are also recognised. 

Agarwood is also known as the “Wood of the Gods” because the scent is used for many religious purposes and traded at a great price. 

The burning of wood is considered a Sunnah (way) of Prophet Muhammad, while its incense sticks are used in Buddhist ceremonies and rituals to purify the environment and create positive energy while praying. 

Agarwood is also one of the most expensive raw materials in the world. First-grade agarwood can cost as much as US$100,000 (RM438,000) per kg. Pure-grade agarwood oil can cost between US$10,000 and US$40,000 depending on its origins, type and distillation process. 

A Difficult Inoculation 

DAdvance Agarwood Solutions Sdn Bhd founder and MD David Liew explained that agarwood trees need to be inoculated with a fungus for the agarwood oil to be extracted. 

He shared how Malaysia used to be among the top three in the agarwood market but dropped in its rankings after many failed inoculations. 

“Different fungi require different inoculation methods but what we are using requires the enzymes. 

“You need to make the trees fall sick so that they can produce agarwood (infection caused by the wound inflicted on the tree trigger its defence mechanism, causing it to produce agarwood resin). Otherwise, it means nothing,” he told The Malaysian Reserve, adding that Vietnam was the first country to use this method. 

Liew also explained that the inoculation process for one tree could cost between US$100 and US$200. 

“So, if I have 1,000 trees, I would have to spend from US$100,000 to US$200,000. People think that agarwood is easy to make and sell, but that is not true,” he added. 

Buyers from the Gulf Nations 

DAdvance Agarwood mainly exports its products to the Middle East since agarwood is favoured for making oud oil. 

This is followed by Japan, Taiwan and China. Even European nations have shown interest in buying the company’s agarwood products. 

“European countries are also starting to believe that medication and cosmetics made from agarwood products are good. 

“Agarwood can be used to make many things, such as shampoos, medicines and even products for prayers,” Liew said, recalling a trip to Japan in 2014 where 27 companies were willing to buy his agarwood. 

Challenges for the Industry 

DAdvance Agarwood co-founder and international trade director Adrieent Tan emphasize that the cultivated agarwood has started to gained traction locally and internationally.

Unfortunately, the trees are becoming scarce nowadays and they have been listed as “endangered” under the Convention of International Trade of Endangered Species. 

Consequently, the price of agarwood is constantly increasing due to growing demand and lack of supply, despite only one out of 10 trees harvested being needed to produce agarwood. 

In order to conserve agarwood trees, Tan advised buyers to purchase agarwood from farms instead of taking the wild ones. 

Unlike other plantations such as rubber and palm oil, agarwood has not received much support from the government. 

Tan hoped that the government would include agarwood in its trade missions. 

“We just hope that agarwood can be part of trade missions because it is difficult for us to export agarwood at the moment due to its status as an endangered species. 

“Other countries think that our agarwood comes from the wild,” he said. 

Tan also hoped that these trade missions would make it easier for agarwood to be exported onto the international platform. 

Agarwood Market Outlook 

Despite all the challenges, Tan is optimistic of Malaysia’s agarwood market in the next five to 10 years. 

It requires the involvement of all parties, and Tan has seen a growing momentum. 

As of December 2019, a total of 217 companies and individuals have registered with the Malaysian Timber Industry Board (MTIB) as agarwood producers that involve 2,398ha and 2.3 million trees, while a total of 13 companies have registered with MTIB as agarwood exporters and importers. 

Other 22 companies and individuals are registered as manufacturers, while over 50 agarwood product businesses have been identified across Malaysia. 

Sandalwood vs Agarwood 

Sandalwood and agarwood have many things in common. They are both prized for their aroma, medicinal properties and uses in rituals. 

However, sandalwood is more commonly found and manufacturers can still extract oil from healthy sandalwood plants, unlike agarwood which needs to be infected. 

Sandalwood trees can be found throughout South and SE Asia, and can grow to as tall as 10m. 

These slow-growing plants take about 30 years to be harvested for economic use and are partially parasitic on the roots of other species of trees. 

The oil produced from sandalwood is yellow and gives off a warm and woody odour, and is not only used in incense, cosmetics and perfumes but also in food and beverage flavouring. 

Moreover, sandalwood can be used for carving sculptures due to its dense nature. 

According to a research report by the Australian Forestry Journal, there are increasing areas of sandalwood plantations in Malaysia, Sri Lanka, Thailand and Vietnam. 

Its demand will also continue to increase since sandalwood is important in South, East and SE Asian cultures. 

“It is difficult to predict the future demand for sandalwood products in SE Asian countries, but it is likely that increased domestic demand (in perfumes, medicines, furniture and incense) will absorb increased domestic production,” it said.