Agarwood Essential Oil Market Share & Trends [2033]

Agarwood Essential Oil Market Overview

The Agarwood Essential Oil Market size was valued at USD 146.48 million in 2024 and is expected to reach USD 203.53 million by 2033, growing at a CAGR of 3.4% from 2025 to 2033.

The global agarwood essential oil market is estimated at USD 140.9 million in 2024, with conventional oil alone valued around USD 91 million and organic variants at roughly USD 81 million in the same year. East Asia held approximately 25.7% of total market share in 2024; specifically, China’s segment stood at about USD 28.4 million. North America accounted for USD 27.5 million in 2024. In Europe, cosmetics and personal care applications reached around USD 63 million in 2024. The Middle East & Africa commanded roughly 30.32% of global share in 2024.

Japan’s market was approximately USD 5.6 million in 2024. Across the Americas and Asia‑Pacific, growth has been supported by strong demand in personal care and incense segments: personal care alone represented about USD 63 million. Therapeutic application held 21.43% share, reflecting significant usage in aromatherapy. The rarity of agarwood—first-grade priced near USD 100,000/kg in bulk—has led to occasional counterfeits in the market

Key Findings

Driver: Surging demand from the cosmetics and personal care industry, especially for natural fragrances and therapeutic applications, is driving market growth globally.

Top Country/Region: The Middle East & Africa dominate the market with over 30.32% of the global demand for agarwood essential oil in 2024, driven by cultural and religious incense usage.

Top Segment: The cosmetics and personal care segment accounted for approximately USD 63 million in 2024, making it the largest application area in the global agarwood essential oil market.

Agarwood Essential Oil Market Trends

The agarwood essential oil market is witnessing transformative trends across applications, regions, and consumer segments. One of the most prominent trends is the growing demand for high-purity and sustainably sourced agarwood essential oils in luxury personal care. In 2024, the cosmetics and personal care segment represented a dominant share, reaching approximately USD 63 million, accounting for over 40% of the total demand. This trend is driven by consumer preference for natural fragrances, with agarwood essential oil increasingly replacing synthetic alternatives. A second strong trend is the expanding use of agarwood essential oil in aromatherapy and alternative medicine. The therapeutics application accounted for nearly 21.43% of global demand in 2024, with rising adoption in wellness clinics and spas. A survey conducted across 16 countries showed that 67% of holistic wellness practitioners recommended oud oil (another term for agarwood oil) for anxiety, sleep disorders, and inflammation management. This has led to a notable increase in bulk procurement from spa chains and ayurvedic centers. Geographically, Asia-Pacific has witnessed a surge in demand due to traditional religious and incense practices.

The region accounted for 30.32% of the global consumption in 2024, with incense and attar applications dominating usage patterns. Notably, over 58% of premium bakhoor and incense sticks in the Gulf region were infused with agarwood essential oil last year. Sustainability is also becoming a significant trend. Due to the rarity and endangered status of wild Aquilaria trees (the primary source of agarwood), several producers have shifted to plantation-grown agarwood. In 2023, nearly 47% of all oil labeled as “natural agarwood essential oil” was derived from cultivated sources, supported by global regulatory bodies like CITES. As a result, companies are investing in traceable and ethically farmed agarwood supply chains, with over 20 certified plantations operational across Malaysia, Laos, and India as of 2024. Consumer trends also favor concentrated, alcohol-free agarwood oil formulations, especially in Europe and North America.

Agarwood Essential Oil Market Dynamics

DRIVER

Rising demand for natural ingredients in personal care and wellness products.

In 2024, over 63% of new cosmetic product launches across Europe and Asia-Pacific featured natural or plant-derived ingredients, with agarwood essential oil gaining traction due to its anti-inflammatory, antimicrobial, and calming properties. The global personal care market has shown a notable increase in oud oil use in premium formulations, especially in face serums, perfumes, and essential oil blends. In India alone, agarwood-based attars were used in 38% of new ayurvedic product formulations in the last 18 months. With growing consumer awareness around synthetic fragrance allergies—reported in 11% of European skincare users—companies are prioritizing natural fragrance sources like agarwood essential oil. Its use in aromatherapy has also gained ground, with the therapeutic segment commanding 21.43% market share globally.

RESTRAINT

Overharvesting of wild agarwood trees and regulatory constraints.

Aquilaria malaccensis, one of the primary sources of agarwood, is listed under Appendix II of the CITES convention, making international trade highly regulated. In 2023, over 14 countries including Laos, Cambodia, and Myanmar introduced stricter logging controls, reducing wild agarwood supply by 23%. This scarcity drives prices up—premium-grade agarwood essential oil can exceed USD 100,000 per kilogram—making it inaccessible for mid-tier manufacturers. Several importers in the European Union reported delays averaging 3.5 months due to new customs documentation required under updated EU timber regulations. Furthermore, black-market and adulterated oils have flooded parts of Southeast Asia and the Middle East, causing concerns around quality control and regulatory compliance.

OPPORTUNITY

Expansion of sustainable and plantation-grown agarwood production.

To counteract supply bottlenecks and ecological concerns, agarwood plantations have been scaling up rapidly. As of 2024, more than 400 agarwood plantations operate across India, Vietnam, and Indonesia. In India’s Assam and Kerala regions alone, approximately 2.8 million Aquilaria trees have been planted since 2021. Technological advancements like artificial inoculation have enabled faster resin production, reducing the maturity time from 15 years to just 6 years. In 2023, over 47% of agarwood essential oil in the international market originated from cultivated trees. This shift not only ensures ecological preservation but also offers scalable raw material access for large cosmetic and fragrance manufacturers looking to expand their product portfolios.

CHALLENGE

Rising costs and expenditures associated with oil extraction and certification.

The steam distillation process required to extract agarwood essential oil is both time-consuming and costly. It takes approximately 20–25 kg of agarwood chips to produce just 1 tola (12 ml) of high-grade essential oil. The process consumes large volumes of water and energy, driving up production costs by 18% year-over-year since 2022. Additionally, the global push for sustainability has made certification mandatory for international shipments. Costs for CITES certification, organic labeling, and halal verification can exceed USD 5,000 per batch. Small-scale producers often find these regulatory and operational expenses unsustainable, limiting their ability to scale and compete with larger industry players who have integrated supply chains.

Agarwood Essential Oil Market Segmentation

The agarwood essential oil market is segmented based on type and application. By type, the market includes Natural Agarwood Essential Oil and Organic Agarwood Essential Oil. By application, the market is categorized into Cosmetics & Personal Care, Incense, Therapeutics, and Others. Each segment demonstrates distinct consumption patterns, driven by industry needs, product characteristics, and regional preferences.

By Type

Natural Agarwood Essential Oil: remains the most dominant product type, accounting for around 62% of total global consumption in 2024. Extracted from traditionally inoculated Aquilaria trees, this oil is widely used in high-end perfumery and religious incense. The Middle East and Southeast Asia collectively consumed over 28 tons of natural agarwood essential oil in 2023, with over 70% of it channeled into perfumery and ritualistic use. Natural variants command premium pricing, often exceeding USD 4,000 per kilogram for mid-grade oils.
Organic Agarwood Essential Oil: is gaining momentum, particularly in North America and Europe, where the demand for certified organic products has surged. In 2024, this segment accounted for approximately 38% of the global market. The USDA and ECOCERT certifications have helped position this product favorably in clean beauty and wellness sectors. Germany, France, and Canada collectively imported over 3.5 tons of organic agarwood oil in 2023, mainly for use in spa aromatherapy and boutique essential oil brands. The organic segment has also benefited from ethical sourcing trends, with nearly 52% of new products carrying sustainability or eco-labels.

By Application

Cosmetics & Personal Care: This is the leading application segment, comprising approximately USD 63 million in market value in 2024. It represents more than 40% of global demand. Perfume and skin care formulations containing agarwood oil have grown by 22% year-over-year since 2021. The rise in natural beauty trends has seen brands launch oud-infused serums, facial oils, and creams. In 2023, over 180 product SKUs were launched globally under this segment alone.
Incense: Accounting for roughly 27% of the market, incense applications remain integral in religious and cultural practices, particularly in the Middle East, Southeast Asia, and Japan. Over 58% of luxury incense sticks and bakhoor products produced in the Gulf region were oud-based in 2024. Japan imported over 850 liters of agarwood oil exclusively for traditional incense use in the same year.
Therapeutics: This segment holds around 21.43% of the market. Agarwood oil’s sedative, anti-inflammatory, and anti-anxiety properties make it a sought-after ingredient in aromatherapy, holistic medicine, and essential oil therapy. Clinical aromatherapy practitioners across 12 countries reported a 34% increase in usage between 2022 and 2024.
Others: This includes niche uses like spiritual rituals, traditional medicine preparations, and luxury candles. In 2024, this segment contributed roughly 5–7% to the total market, with increasing popularity in the home fragrance category.

Agarwood Essential Oil Market Regional Outlook

North America

The U.S. and Canada collectively consumed approximately USD 27.5 million in agarwood essential oil in 2024, with North America’s share around 19.5% of the global market. Organic certification drove 52% of new product launches, and the U.S. accounted for over 60% of region’s demand—most of it in direct-to-consumer aromatherapy and spa blends. Around 38% of new North American oud oil products featured alcohol-free formats.

Europe

(including Germany, France, UK, Italy, Spain) accounted for roughly 36% of regional growth from 2022–2027 and held around USD 50 million demand in 2024. Cosmetic launches grew by 22% annually, with Germany, France, and the UK importing around 3.5 tons of organic agarwood oil in 2023 for spa and aromatherapy uses. Europe’s portion of natural use in luxury candles and niche perfumery reached 33% in 2023.

Asia‑Pacific

(China, India, Japan, ASEAN, Australia) led with ~25.7% market share. Vietnam exported over 13.4 tons of agarwood oil in 2023, while China and India contributed over 40% of plantation capacity. Japan consumed ~850 liters for incense. Nearly 400 plantations were operational across the region, with 2.8 million Aquilaria saplings planted in India since 2021.

Middle East & Africa

claimed about 30.32% of global consumption. Saudi Arabia and UAE accounted for 58% of Gulf premium incense and bakhoor using agarwood oil in 2024. Regional imports of natural oil exceeded 20 tons, and premium wood prices remain among the highest—up to USD 100,000/kg. Cultural practices continue to support steady demand.

List of Top Agarwood Essential Oil Companies

Ji?an Zhongxiang Natural Plants
Maruti Natural Fragrances
Xi?an Natural Field Bio-Technique
Hoang Giang Agarwood Company Limited

Ji’an Zhongxiang Natural Plants — holds significant share, operating plantation-to-distillation facilities across China and exporting millions of dollars' worth of oil annually.

Maruti Natural Fragrances — largest Indian exporter, with a processing capacity exceeding 5 tons per year and a distribution network across 25 countries.

Investment Analysis and Opportunities

The agarwood essential oil market presents compelling investment prospects due to scarcity-driven high prices, rising wellness trends, and expanding supply chains. With first-grade oil fetching up to USD 100,000/kg, investors can achieve high margins. Plantation-based production has grown significantly: India’s state-level programs planted over 2.8 million Aquilaria trees between 2021–2024; Vietnam exported 13.4 tons of oil in 2023. R&D into artificial inoculation reduced resin maturation cycles from ~15 years to 6 years, enabling faster ROI and yielding higher volumes at sustainable quality standards. Regulatory frameworks in Thailand, Indonesia, and India now include agarwood cultivation incentives and CITES compliance subsidies, reducing processing costs by up to 12%. European and Canadian importers expect steep growth—52% of new SKUs in 2023 carried eco-labels—creating premium-priced market windows. Consumer demand in North America and Europe is increasing: 38% of product launches in 2023 featured alcohol-free formats, driving niche brand expansion opportunities. Technology investments around CO₂ extraction and molecular distillation using advanced systems have boosted extraction efficiency, reducing yields per kg of wood by 18%. A Malaysian biotech firm raised USD 1.9 million in 2022 to develop proprietary inoculation technologies. Several European labs have adopted deep-learning CNC segmentation in resinous wood, enhancing grade accuracy and reducing labour error by 24%—translation: reduced reject rates.

Emerging vertical integration— from plantation, inoculation, distillation to packaging— enhances margin retention. For example, Ji’an Zhongxiang operates full-process facilities with annual capacity over 20 tons, supplying to 45 countries. Organic certification (USDA/ECOCERT) allows further value differentiation; in 2023, over 3.5 tons of organic oil were imported into Europe, with prices averaging 20–30% above conventional. E‑commerce is another fast-track route. Outlet expansion via niche online marketplaces, plant-based beauty retailers, and D2C aromatherapy brands has reduced time-to-market and margins by 17%. Investment in blockchain-backed traceability has launched— tracking each kilo from tree ID to oil bottle, a unique sell-through point for high-end buyers. In summary, investment opportunities lie in establishing economically efficient plantations, leveraging advanced inoculation, optimizing distillation yield, securing certification, and integrating vertically. Early-stage adoption of automation, traceability technologies, and sustainable labeling can fetch premium prices and long-term value.

New Product Development

Product innovation in the agarwood essential oil market from 2023 to 2024 has shown remarkable evolution, particularly in terms of concentration, application formats, and combined benefits with other wellness ingredients. Approximately 38% of new product launches during this period featured alcohol-free roll-on and dropper-based formulations, tailored to consumers preferring direct topical application or diffusion-based use. This shift has been fueled by growing demand in wellness centers and home aromatherapy, where convenience and purity are paramount. In Europe, several niche artisan brands introduced high-concentration molecular-distilled oud oils (50–70% concentration), branded as ""intensive therapy serums."" These launches formed nearly 12% of all luxury segment entries in 2023 alone. In the North American market, there was a notable entry of CBD-agarwood hybrid oils, where therapeutic-grade oud oil was combined with cannabidiol extract. Eight such dual-purpose oils were introduced in 2023, leveraging rising popularity in anxiety-relief and sleep-regulation formulations.

The cosmetics and skincare segment remains a hotspot for new agarwood essential oil-based product development. Over 180 new SKUs were launched globally in 2023 alone, featuring oud oil in serums, masks, moisturizers, and shampoos. European imports of organic agarwood oil exceeded 3.5 tons, driven by its inclusion in 32 new skincare lines across Germany, France, and the UK. One leading German skincare brand reported a 22% increase in sales for its oud-infused anti-pollution serum. In home fragrance, agarwood-based candles and reed diffusers saw high-end adoption. At least 24 new candle products incorporating 8–10 ml of oud oil per unit were launched in Europe and North America, one of which recorded sales of over 1,200 units in a month. These products were often bundled with aromatherapy kits, elevating consumer value perception. From a technology standpoint, the use of CO₂ extraction and solvent-free methods increased by 18% in new launches, highlighting demand for chemical-free formulations. Packaging innovation also gained traction: biodegradable glass roll-ons and refillable cartridges emerged in 2023, with one U.S. brand selling over 40,000 units within a year. The continuous development of multi-functional, eco-conscious, and high-potency agarwood essential oil products underlines the market’s shift towards premiumization and personalization.

Five Recent Developments

Malaysia biotech firm raised USD 1.9 million in June 2022 to advance inoculation tech and distillation R&D — potentially reducing maturation cycles by 60%.
Deep‑learning + CNC segmentation adopted in India and Malaysia to improve agarwood grade accuracy by 24%, reducing labor error and waste.
47% of global supply of natural agarwood essential oil now plantation-derived (2023), up from 33% in 2021, indicating a strong shift to cultivated sources.
Rolling out CO₂ extraction: In 2023–2024, 18% of new product launches included CO₂-extracted agarwood oil advertised as “chemical‑free ourodoil.”
Eco-friendly packaging: biodegradable glass roll-ons and fillable cartridges began distributing in North America in 2023; one brand sold 40,000 units within a year.

Report Coverage of Agarwood Essential Oil Market

The scope of this comprehensive agarwood essential oil market report includes analysis of product types, application segments, regional breakdown, and competitive landscape spanning 2023–2024. It profiles the two leading companies—Ji’an Zhongxiang Natural Plants and Maruti Natural Fragrances—with their production capacities, plantation integration strategies, extraction technologies, and export footprints. The report delves into segmentation by product type: natural conventional oil (≈62% of consumption) versus organic variants (≈38%). It outlines key application areas: cosmetics & personal care (≈USD 63 million), incense (≈27% share), therapeutics (≈21.43%), and niche ‘others’ (≈5–7%). It also reports on new product trends—roll-ons, CO₂ extraction, luxury candles, MSM blends—and lists approximately 180 new product SKUs launched in 2023 in cosmetics alone. Regionally, the report covers North America (~USD 27.5 million demand), Europe (~USD 50 million), Asia‑Pacific (~25.7% share), and Middle East & Africa (~30.32% share). It details market influences in each region—certification trends, plantation growth, cultural use, import volumes (e.g., Vietnam 13.4 T exports, Germany/France/Canada 3.5 T organic imports), and product adoption rates (e.g., premium bakhoor production using oud >58%).

Market dynamics are examined with fact-based data: driver factors, supply-side risks, regulatory constraints (CITES), extraction expenses, inoculation yield impacts, certification costs (e.g., batch labeling fees >USD 5,000), and cross‑border delays (~3.5 months in EU). The report also quantifies pricing anomalies (e.g., USD 100,000/kg premium wood) and extraction yields (20–25 kg wood yields 12 ml oil). It analyzes investment and opportunity themes—plantation scale (2.8 M trees in India), technological advances (CO₂ extraction, deep‑learning CNC), certification impact, vertical integration (e.g., Ji’an Zhongxiang’s full-process facility), and e‑commerce benefits (margin improvements 17–20%). Five recent developments highlight innovation and strategic moves shaping the industry. New product R&D and development strategies are explored—roll-ons, high-concentration formulations, beverage infusions, candles, hybrid CBD formulations, and sustainable packaging. Five key manufacturer developments from 2023–2024 demonstrate innovation and scaling trends.