Introducing Agarwood
In the Book of Genesis, Agarwood is mentioned as the only tree from which Adam and Eve could take cuttings.
Agarwood, or Gaharu, to give it its Asian name, is the resin formed in the heart of the Aquilaria tree as the result of insect penetration or storm damage, just as a pearl will form inside the oyster when a piece of grit irritates it. The Aquilaria tree is a fast-growing, subtropical forest tree that can be found in South East Asia, particularly in Thailand, Vietnam and Myanmar (Burma). This resin is immensely valuable, as we will discuss later, and as such is subject to the worst excesses of exploitation.
Agarwood has been traded and highly prized for thousands of years and is an integral part of the cultures of many different countries. It is used as a perfume in the Middle East by burning, it can be used for medicinal purposes and, in its distilled form known as Oud, it is increasingly used in extremely expensive perfumes for the Western market. It also has significant value in certain religious ceremonies.
The value of Agarwood
Since Agarwood has been growing in desirability in recent years beyond its traditional markets, its value has soared. Depending on its origin and the quality of the resin, its price can far exceed the price of a comparable weight in gold. Consequently, the Aquilaria tree in its natural habitat is threatened with extinction through indiscriminate felling for its potential resin and the lack of a sustainable policy in several key countries. Needless to say, without active interventions through managed plantations, Agarwood will disappear.
The Danger of Extinction
It is clear that trade and harvesting controls are not always working, often through the corruption of middle ranking officials in key countries, so active interventions, such as the one we are proposing, are critical. Managed plantations will provide a source of healthy stock, increase the genetic pool of the trees, increase resin production and help prevent disease. It will also ensure that the market for this valuable product is regulated and transparent, something that should be of interest to investors.
Alternatives to Agarwood
It is often asked if the essential aspects of Agarwood can be synthetically reproduced. The answer is a clear ‘No!’ Those who use Oud oil, the distillation from Agarwood, in countries such as Qatar on a daily basis would tell you that they can tell the clear differences between Oud from Cambodia and Thailand, for instance, and whether the quality is what they would accept. Trying to reproduce the subtleties of such discriminating judgements would be impossible to achieve. There are of course copies for the lower end of the perfume market, but that is another matter, and it is not where serious investment lies.
Agarwood - Oud
As we have already mentioned, Agarwood, also known as Oud, is a very dark and very aromatic resin. It is this which is so prized and from which the oil is extracted.
In its natural habitat, the production is a very slow, laborious process and the production of Oud can take many years, and the older the resin, the more prized it becomes. Nowadays, because of its huge cost and extreme rarity in the wild, trees are cultivated and the resin is prompted by intervention of some material and extracted by distillation.