Agarwood facts
introduction
Agarwood is the resinous part of the Agarwood tree, which is used for the purposes of medicine and fragrance. The origin of Agar trees is traced to the evergreen forests of Southeast Asia. They are abundantly found in the North Eastern states of India, and in countries like Myanmar, Cambodia, Malaysia, Indonesia, Thailand, South Korea, Philippines, Laos, Japan, and so on. They are naturally growing trees in places that resemble the Western Ghats of Karnataka in climatic conditions and altitude.
The indiscriminate harvesting of Agarwood from its natural habitat has seriously hampered the natural availability of Agarwood in the forest. On the other hand, the price of Agarwood is quite high because of the short supply of Agarwood. This appealing market price has attracted farmers to Agarwood more and more in order to meet the high market demand. The mass plantation of Agarwood trees was taken up in a sustainable way by plantation companies across Asian countries to obtain the highly valuable Agarwood.
The formation of Agarwood is generally associated with the mechanical wounding and/or natural fungal infection of Agarwood trees. Resin is secreted by the trees as a defense mechanism, and will be deposited around the wounds for many years after the injury, where the accumulation of chemicals will farm Agarwood. As only physiologically triggered Aquilaria tree can produce Agarwood, artificial techniques of producing Agarwood are currently going on in the Agarwood industry. The infected part of the tree, after its separation from the non-infected part of the tree, is processed into sweet-smelling oil and chips as incense for burning all over the world.Agar oil and wood are highly sought products around the world. Agar tress can offer lucrative global trade options to locals in the regions where these trees are found. Agar oil acts as a world-class perfumery fixative and is highly sought after and priced by European perfumers for making their best-grade scents. It acts as a stimulant, cardiotonic, carminative, aphrodisiac, alternative anodyne, antidiarrheal, antiasthamatic, astringent, laxative, stomachic and tonic.
Agarwood is one of the most expensive natural raw materials in the world. The price of Agarwood varies depending on the quality. While low grades of Agarwood may sell at the rate of Rs 500 per kg, superior grades of chips are sold at over Rs 1,50,000 per kg. The price of oil varies from Rs 1,500 to Rs 12,000 per tola. About 80 countries around the globe use Agarwood products. The export of Agarwood from Singapore market itself crosses over a billion US dollars annually. It is estimated that the current global market for Agarwood is in the range of USD 6 to 8 billion, and is growing by the year.
history
Agarwood gained great cultural and religious significance in ancient India, being described as a fragrant product in the Vedas as early as 1400 BCE. It is an integral part of culture in all the Agarwood-producing countries. It is used by the Hindus, Buddhists, Muslims, Christians, Taos, Sufis, and so on. It is widely used in Ayurveda, Unani, Arabic, Tibetan, Sufi and Chinese medicines.
‘Agaru’, a name derived from Sanskrit, later became Agar in Hindi, from which the word Agarbathi was coined. For ages, India was the centre of production and trade of Agarwood. Agarwood was sourced from different parts of the North Eastern states, and then processed into wood, chips, oil, powder and other commercial products which are used in perfumes, incense, and medicines.
Agarwood was mainly exported to countries in the Middle East from Mumbai and Kolkata. Owing to the scarcity of Agarwood in India, traders and suppliers shifted their base to Southeast Asian countries, especially Singapore.
wood of gods
For ages, tribals observed the production of Agar, used the produce, conserved the plant variety, and called it the ‘Wood of Gods’. In fact, in India’s religious and social sectors, agarbathis and oudhbathis are used more than sandalwood.
fragrance of nirwana
The followers of Buddha believe that the burning of Agarwood and taking in its aroma helps one reach the ultimate stage of meditation, and hence use it accordingly. In the very words of Buddha, “The aromatic fragrance of Agar takes one to the stage of nirvana.”
historical uses of agarwoood
• It is extensively mentioned in the Vedas as a favourite of Lord Krishna.
• It has been sought after for ages for its fragrance in religious ceremonies, and its incense is believed to have been burned at the burial of Jesus Christ.
• In Genesis, Agarwood is mentioned as the only tree from which Adam and Eve could take cuttings.
• Prophet Mohammed is believed to have used Agarwood to perform fumigation ceremonies, a practice which is continued till today.
• Religious texts were written on the bark from Agar trees, as referred by Srimanta Sankardev in one of the oldest religious Hindu texts.
• The word ‘aloes’, which means Agarwood, is mentioned in the works of the Sanskrit poet, Kâlidâsa, dating back to 4th to 5th century CE.
• The use of Agarwood in the prescription of traditional Chinese medicine had also been recorded in the 5th to 6th century.
• It has found a mention in the 8th century tomes of Sahih Muslims.
• The word ‘aloes’ has been mentioned several times in the Old Testament.
• Hebrews have referred to Agarwood as ‘ahaloth’ or ‘ahlim’.
distribution
India
Recent botanical research has proved that Agar species trace their origin to India. The Aquilaria Malaccencis species of Agarwood was found in Arunachal Pradesh, Assam, West Bengal, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. The Aquilaria Cassiana species of Agarwood was found in the Khasi hill range of Meghalaya. According to research, the Agallocha, Malaccencis and Cassiana species of Agarwood have reached other countries from India.
Because of the extensive harvesting of the tree after the ‘80s, and its cutting down to extract Agar, trees reduced in numbers in just two decades. Only a few Agarwood trees remained in the protected forests. Later, CITES came in for the conservation of tree. Earlier, the Forest Department supplied Agarwood to the processing units at a fixed price. The government issued licenses to processing units and these units used imported Agarwood because of its short supply in the region. Mumbai was the main centre for the export of Agarwood in India, in addition to Kolkata and a few other cities. Villagers, and the owners of home gardens and tea estates, are currently cultivating Agarwood, and thus its cultivation is going on in a large scale in the North Eastern states.
Bhutan
Lao People's Democratic Republic
Philippines
Malaysia
Myanmar
Indonesia
Singapore
Though a few species like Aquilaria Malaccencis were found in a few forests of this country in the past, they have disappeared altogether now. However, Singapore ranks first in the world in the re-export of Agarwood. Export companies here own modern warehousing facilities and trade offices. They mainly source Agarwood from various Southeast Asian countries for minimum process and exports.
Thailand
Vietnam
China
Variety & Names
Aquilaria belongs to the Thymelaeaceae family. To date, a total of 21 species have been documented in the Aquilaria genus. Although all the species produce Agarwood either in small or large quantities, about 13 of them are recognised as Agarwood-producing species. The destructive exploitation of trees, unfortunately, has badly affected the wild population of all the Aquilaria species.
Botany classifies Agar as follows:
Family: Thymelaeaceae
Botanical genus: Aquilaria
A few of the main species found in different countries are as follows:
| Species Name | Countries Where they were/are found |
|---|
All the breeds of Agarwood trees are medium sized, and are neither too big nor too small. They grow naturally with the other trees and have deep roots that don’t hamper the growth of the trees they are growing with.
names
India
Agar in Hindi, from the Sanskrit word ‘agaru’; in Assam, it is known as garu, from the Sanskrit word ‘garu’, meaning heaven
China
Chen-xiang/ hsiang, meaning sinking in water
Vietnam
Tram huong, meaning sinking in water
japan
Jin-koh
Arab countries
Oodh, since wood is known in Arabic as ‘oud’.-koh.
Europe
Eagle Wood and Aloes Wood from the Latin word ‘aguila’, meaning eagle.
tibet
Agaru
laos
Mai ketsana
USES OF AGARWOOD
Agarwood has been widely used in perfumes, traditional medicines, aromatic food ingredients, and as raw materials for incense and religious purposes. In medicines, it is used as a natural sedative, pain reliever, digestive aid, and carminative. The dense aromatic fragrance of Agar perfumes and oils lifts the spirit like no other perfume. Because of its appealing aroma, its popularity is unmatched. No other natural aromatic and essential oil product can match up to the reputation of Agar.
Agar oil is widely used in the Arab countries as Agar attar. Agar oil is widely used as the base in the manufacturing of perfumes. It is preferred by Muslims as Agar oil is non-alcoholic. Worldwide, over 500 perfumes brands have Agar as one of their key ingredients. There is a great demand for Agar oil in the Middle Eastern countries. No alternative synthetic oil that is equal to superior grade Agar oil has been artificially manufactured till date due to its complexity.
- In the traditional medicines of South Eastern countries, Agarwood has been used as the main ingredient in many formulations. It is widely used in the treatment of respiratory, stomach, and heart-related problems, and in aromatherapy.
- In many countries, especially Arab countries, Agarwood chips and oil are used as an aphrodisiac.
- Agar is used as a therapeutic ingredient in the preparation of medicines.
- Agar oil is used in the manufacturing of oodh soaps and incense sticks, and in a few brands of liquor.
- Thin sticks of Agarwood are used as an insert in cigarettes for its smooth smell.
- The aromatic fragrance of Agarwood is appealing to the senses and lifts the mood like no other.
- Clothes worn for prayers are always coated with Agar attar in Muslim countries.
- Agarwood leaves are used in the manufacturing of tea which is popular for its health benefits.
- Flakes of Agarwood are also used as a spice for food, especially when dipped in soups.
- Agar enjoys a prime place in the Koh-Doh (incense ceremony) festival of Japan.
- Activities begin with the burning of Agar in the temples of Shimsho Buddhists in Vietnam.
- In various types of medicines, especially in China, it is used as a key ingredient. Chen-Xiang medicinal Agarwood is extensively sold.
- It is widely used in the treatment of mental depression.
CULTIVATION
The indiscriminate harvesting of Agarwood from its natural habitats has seriously hampered the natural availability of Agarwood in the forest. On the other hand, the price of Agarwood is quite high because of the short supply of Agarwood. This appealing market price has attracted farmers to Agarwood more and more in order to meet the high market demand. The mass plantation of Agarwood trees was taken up in a sustainable way by plantation companies across Asian countries to obtain the highly valuable Agarwood. In order to protect the species from extinction, government institutions have also developed Agarwood plantations in forest lands, both in India and abroad.
The good demand for Agarwood, coinciding with the dwindling number of Agarwood trees in the wild hinted that the price of Agarwood would continue to rise.The best example of the domestication of Agarwood in new cultivation is the Vanadurgi plantations.
Aware of the fact that most commercial crops like coffee, rubber and cocoa are of foreign origin, but grow well in the climatic conditions of Western Ghats, Vanadurgi introduced Agarwood. Currently, over 2.5 million trees are in ground, and the number is increasing by the year as the planting is going on. The agricultural sector of Malnad region is facing a multitude of problems owing to many reasons, including globalisation. A host of factors ranging from the shortage of agricultural labourers to the price fluctuation of traditional crops has forced farmers of the region to give up crops that necessitate dependence on labourers, turning agriculture into an unprofitable field. In such a scenario, Agarwood, that owes its origin to India, is getting introduced to the farming community as a crop that can take them forward on the path of progress.
Agar tree can be profitably cultivated in marginal lands, as also in shallow fields and on hill slopes, making it a crop that is suitable for cultivation in diverse places. A number of private Agarwood plantations have been established in all the states of Northeast, in addition to government plantations. The Silviculture Division of Arunachal Pradesh has converted large areas of degraded forests into commercial Agarwood plantations. The climate of upper Assam is suitable for the cultivation of Agarwood, accounting for a large number of plantations in the region. Agarwood is also planted in lower Assam, in Lanka, Hojai, and the surrounding villages, over the past few years, wherein trees are planted in the home gardens, private estates, and in small tracts of land.
NATURAL AGARWOOD FORMATION
The formation of Agarwood is generally associated with the wounding and fungal infection of Aquilaria trees. Many species of fungi and bacteria float about in the rainforests. When Agarwood trees are damaged, fungus enters the tree. As the fungal infection progresses in response to the fungal attack, the tree produces resin. The further progression of infection results in the dense and dark resinous heart wood. The resin-implanted wood is generally called as Resinous Wood or Infected Wood.
In the North Eastern parts of India, stem borer Zeuzera conferta bores the Agar tree, making hollow tunnels inside. Fungus enters the plant through the vertical hollow parts of the zigzag tunnels, which act as the primary site of infection. Later, fungal infection spreads to the tissues, and larger parts of wood volumes get infected. Insect boring and fungal infections are not dependent on the age of the tree.
Insects may bore even three-year-old plants, and in such cases, plants may die due to over stress. If the fungal infection happens when the tree is 5 or 6 years old, it is ideal, as 10 year-old trees are sufficient to access commercial Agarwood. The quantity and quality of resinous Agarwood formation depend on the intensity and frequency of insect infestation, and the duration of infection.
The resin is secreted by the trees as a defence reaction and deposited around the wounds over the years following the injury, where the accumulation of the volatile compounds eventually forms Agarwood. The accumulated oleoresins produce precious Agar oil and aguru, and become odoriferous. The accumulation of oleoresins gets deeper as per the rate of infection as well as the ageing of the infection. As more oleoresins are deposited, the colour of the infected wood gets intensified and changes from brown to black.
Naturally, Agarwood formation is due to the physical wounding or the damage of trees caused by thunder strike, animal grazing, pests and diseases. They expose the inner part of the trees to fungal microbes, which initiate the defense mechanism of trees for resin production. Native farmers apply mechanical injuries before the spring season by making deep cuts with a sharp axe. Such artificial injuries provide an infection site for fungus and also push the tree to undergo stress. Many traditional wounding techniques include nailing, holing, burning, trunk breaking and bark removal to create physical wounding and stress to develop Agar.
In a natural forest, only 20 to 25 % of the Agar trees may become infected and productive. The fungi that enter the tree trunk thus are of different species like Ascomycetes, Deuteromycetes, Aspergillus, Botryodiplodia and Diplodia. As these fungi go about injuring the inside of the tree trunk, the tree offers resistance to it and brings the development of fungi to a standstill. Because of these chemical reactions inside the tree trunk, a white, milky substance called oleoresin is produced. Finally, a large quantity of dark brown Agarwood is produced on the tree trunk. About 3 to 6 years are needed for the production of resin wood from the tree that undergoes primary infection. This production is dependent on a number of factors including the quantity of oleoresin produced, its density, primary fungal infection area, etc.
TRADITIONAL TECHNIQUES
Naturally, Agarwood formation is often linked to the physical wounding or damage of Aquilaria trees caused by thunder strike, animal grazing, pests and disease infestations. The common practice among traditional Agarwood planters is to damage the Agarwood tree trunk artificially to allow fungi to infect the tree. This operation is generally done just before the onset of winter, when a 30% deep cut is made on the tree trunk with the help of a sharp knife. The cuts made in this manner allow the fungal infection to begin and reach the inside of the tree trunk. This method is successful in a cool environment where the soil is rich in naturally occurring fungi.
In addition to the natural formation process of Agarwood, many traditional induction approaches like burning the tree partly by fire are followed by farmers. Fixing nails on the tree trunk, at a distance of 2 to 3 inches from one another, is a common process.
Drilling holes with heated steel rods on the tree trunk at a distance of 10 to 20 inches from one another is another method. Local private Agar planters apply mechanical injuries with a sharp axe by making deep slope cuts. All these injuries cause stress to trees and also create the primary infection site for fungal attack, which eventually forms Agarwood. The low quality Agarwood formed from this treatment, known as Ghap Mal in Assam, is used for the extraction of oil.
The formation of Agarwood is generally associated with this wounding and fungal infection of the Aquilaria trees. The resin is secreted by the trees as a defense reaction and deposited around the wounds over the years following the injury, where the accumulation of the volatile compounds eventually forms Agarwood. This traditional technology has been in practise in all the Agarwood growing countries since many years
ARTIFICIAL INOCULATION
As Agarwood formation in the natural environment is a very uncertain process where it may take many years, or not lead to the formation of Agarwood at all, artificial inoculation technology was developed. This technology is effective in domesticated Agar trees and can create a stable income for farmers. As per historical references, artificial inoculation for Agarwood formation can be traced back to China in 300 C.E.
The understanding that mechanical injuries, in addition to fungal infections, promote Agar formation in trees led to the application of fungal cultures. Many cultured fungi strains are isolated from the native regions and introduced in healthy Agarwood trees for the formation of Agarwood. In general, fungal consortium was used for a better response to infection. The fungal-culture-inoculated sites of the trees show that trees have produced resins around inoculated areas.
The advantage of fungal cultures is that it’s eco-friendly and safe for both the environment and the product. But, fungal inoculation normally leads to inconsistent development of the infected area, and the quality of Agarwood, due to the natural spreading of fungus. The success of fungal application is also based on weather and climatic conditions. It is also a laborious process as it involves heavy holing. A very long time is required for the production of good quality and quantity of Agarwood.
Besides the fungal infection approach, the use of chemical-inducing technologies is nowadays common in the Agarwood growing countries. All these induction techniques using food-grade formations have proven to be successful in the stable production of resin in the trees.
SANDALWOOD VS AGARWOOD
Even though both Agarwood and sandalwood enjoy a wide reputation and demand all over the world, the reasons behind the demand are quite different. For centuries, sandalwood is used across the world for religious, social, cultural and medicinal reasons. Like Agar oil, sandalwood oil is also quite popular as a raw material in the production of many cosmetics. Both the products are used according to the community and cultural interests of the place.
Agarbathis and oodhbathis are more widely used than sandalwood in the religious activities of India. Sandalwood is available in both natural and synthetic varieties, but the synthesis of Agarwood has not been successful owing to its complexity.
Today, both Agarwood and sandalwood crops are widely grown in Karnataka, which is known as the Home of Sandalwood. Sandalwood grows well in parts of Karnataka, especially the dry regions. However, the roots of sandalwood are parasitic in nature, while the roots of Agarwood are not. When we compare the two in terms of the time required for them to mature and fetch returns, sandalwood takes nearly 20 years while Agarwood takes only about 8 to 10 years.
In the sandalwood growing areas of Karnataka, Tamil Nadu and Kerala, poaching is a major problem. Sandalwood trees can be poached even when they are young. However, it is not easy to poach Agarwood as the produce of the tree can be harvested only after the trees are inoculated and the resinous wood is formed inside. Moreover, the identification and separation of Agarwood produce takes a very long time, thus making it difficult for poachers to steal Agarwood trees.
When it comes to the price factor, both Agarwood and sandalwood are expensive products. In conclusion, as stated earlier, value-based natural products will always enjoy a good demand on the global scale.
HARVESTING OF AGARWOOD
In modern times, as the demand for the traditional variety of Agarwood rose, the harvesting of Agarwood also considerably increased. This rise in demand and production saw the unscientific harvesting of these trees, making natural trees almost disappear in their native countries. Instead of cutting only the fungus-infected part of the tree in stages, young trees that were free from infection were also cut down, pushing Agarwood to the brink of extinction. However, in the recent years, Agarwood has been cultivated extensively in the various states of India, and also other Southeast Asian countries because of the lucrative returns it fetches.
Factors such as the age of the tree or the size of the tree trunk cannot decide the harvest time of commercially grown Agarwood. Agarwood trees can be harvested only when the production of the aromatic trunk is complete and the tree starts drying up. Generally, when Agarwood is grown as a commercial crop, harvesting has to be done at a specified time for certain trees, making it a constant operation.
Once the aromatic trunk or Agar is produced, the tree may sometimes slowly start drying up, or the leaves may turn pale yellow in colour. On the basis of its visual appearance, one can decide when the tree can be harvested.
On an average, commercially grown Agarwood trees treated with artificial inoculation can be harvested in 6 to 10 years. Depending on the method of inoculation, trees may be harvested in one year, two years or three years after inoculation. Going by this timeframe, income from Agarwood is expected from 7 to 13 years after its planting.
March to May is the right time for harvesting, and before the commencement of the rainy season, harvested trees will produce new shoots. Care should be taken so that the harvested tree does not die due to stress. If required, it’s recommended to provide irrigation in a timely manner.
REGENERATION OF TREES
Coppicing is the traditional method of tree management wherein new shoots grow after the tree’s harvest. Coppiced wood shoots are called as copse. Agarwood coppicing is the management technique of harvesting and felling trees at the base, and allowing them to regrow, in order to provide a sustainable supply of Agarwood. Coppicing has been very successful in the case of Agarwood trees. This practice has a number of benefits over replanting, as the felled trees have already developed the root system, making regrowth quicker and less susceptible to browsing and shading.
Regeneration is the process by which new seedlings become established after the forest trees have been harvested, or have died due to fire, insects, or disease. Agar trees will regenerate freely both within the plantation, as well as in the surrounding areas of the plantation. Trees will flower in the month of May-June and seeds will fall down in the month of August. Seeds will germinate naturally in the farmlands where the cultivation is going on in a conventional manner. Agar seedlings develop well where once trees were harvested earlier, depending on the prevailing atmospheric conditions around them.
Tender shoots develop at the base of harvested Agar trees, grow very fast, and will be ready for the next round of inoculation in 5 to 6 years. Since the area is already rich in fungi, the infection of the regenerated tree is much faster.
Harvesting the tree at 2 ft height will encourage the better growth of new shoots in comparison to harvesting at ground level. Generally, only two shoots, in the opposite direction, are allowed to grow from a tree. New growth emerges, and after a number of years, the coppiced tree is harvested, and the cycle begins anew. Coppicing maintains trees at a young stage, and a regularly coppiced tree will never die of old age.
quality test
The most popular method of checking the quality of Agarwood is by burning it. The aromatic fragrance that comes when a piece of Agarwood is burnt helps in determining the quality of Agarwood. To determine the density of resin, the most common method used is to check for bubbles in the flame, and the oil oozing out of the wood.
Another traditional method of checking is by dipping the materials in water. Right from Agarwood timber to powder, Agarwood of all grades, varieties and sizes can be dipped in water to test for its quality. As per this method, Agarwood is dipped in water to check if it sinks, half-floats, or floats, to conclude its resin density. The sinking type is considered to be the best as its resin density is higher, while the half-floating and floating varieties have low density resins and are hence categorised as Grade B or named as per the local trade. The half-floating, floating and low grade varieties of Agarwood cost less in comparison to superior or sinking grades.
The quality of Agar oil can be checked by its visual appearance and aroma, based on experience. This the common practice in the Assam regions of India. The superior grade of Agar oil is pale yellow to slightly brown in colour, while Agar oil of medium quality is brown in colour. Second grade oil will be semi-viscous in nature. Further, the quality of oil depends on the processing techniques adopted. It also depends on the number of days the material is soaked in water for fermentation. Mix-matching the lower grades with higher grades of oil is the common adulteration process that is followed by non-authentic distillers. In order to avoid such adulteration, all standard companies are currently testing oils in the GCMS process, which gives an exact indication of ingredients and decides on quality based on standard parameters
Oud oil, chips, flakes, powder, 5-10 kg heavy Agarwood timber, logs, etc., are traded in general wholesale markets. Even Agarwood products of similar appearance carry different price tags due to their internal quality variants. Prices are fixed as per the density of resin in the wood, and the fragrance when it is burnt. Species of trees from which the Agarwood or oil is extracted, its colour, shape and size are also the deciding factors for pricing. Most customers prefer Agarwood of lower grades like chips, flakes, etc., instead of Agarwood logs of superior grades. This is because of the size, transportation cost, and the expensive price of logs.
quality marker
The main attraction of Agarwood is its extremely high market value. Yet, the price of Agarwood is largely determined by its quality, which is gauged based solely on human experience in most countries where it is grown. The complicated appearance of commercially traded Agarwood, which is also decided based on personal experience, is the main reason for the unavailability of a standard quality grading system. Recently, the metabolite analysis of Agarwood has proven that there is a connection between the resin quality and the metabolite constituents of Agarwood.
The number and types of metabolite constituents may vary depending on various factors like the age of products, the source of materials etc. It’s been noted that there are over 150 compounds in different types of Agarwood sourced from different species. The content of aromadendrene was found to be higher in superior grades of Agarwood.
Therefore, this particular chemical is also considered as an effective chemical marker for Agarwood grading. The main composition of Agarwood resin is mixtures of sesquiterpenes and chromones. The key ingredients of essential oil are penoids, which, in combination with a few major volatile aromatic ingredients, create the unique and fragrant-smelling nature of Agarwood.
As per studies, important contributors to the sweet, fruity and long-lasting scent of Agarwood are PEC derivatives as they are one of the main ingredients in Agarwood. Such ingredients are only detected in the supercritical carbon-di-oxide method, and not present in steam or hydrodistillation. PEC derivatives are useful ingredients in the grading of Agarwood, and are the potential markers for authentication.
The quality of Agarwood oil is determined in trade by the GCMS test reports. Although Agarwood oil is purchased in the ground level based on its visual appearance and aroma, it is finally tested by the GCMS method when it is sold to the end user, especially big perfumery companies.
Large companies that import oil do so only after stringent quality checks. Since there is no synthetic alternative available for Agar oil, the demand for natural Agar oil will always be good.
INTERNATIONAL MARKET
Agarwood enjoys a good demand throughout the world as a raw material for incense, perfumes and medicines. Middle East and East Asia are the two major regions of consumption. According to reports, over 80 countries import Agarwood globally. A few importers of Agarwood are China, Hong Kong, Taiwan, India, Japan, Korea, Kuwait, Morocco, Qatar, Saudi Arabia, Singapore, Spain, USA, Israel, UAE and European nations.
Though the export, import and re-export of Agarwood products is widespread among the various countries of Southeast Asia, Taiwan and Singapore lead the group. While Indonesia and Vietnam are the major exporters of Agarwood products, other countries like Australia, Cambodia, Canada, Hong Kong, India, Indonesia, Israel, Laos, China, Malaysia, Myanmar, Pakistan, South Africa, Thailand, USA, and Malaysia are also in the export trade. While in most of the aforementioned countries Agarwood crop is harvested, in the rest of the countries, it is imported and re-exported.
As the wealth of the consumer countries has gradually increased in the recent decades, the market demand for Agarwood has started to exceed its supply. Prior to 1995, the North Eastern states of India also exported Agarwood on a large scale, which was traded as Oud, especially in the Middle East. Many industries in India process and market imported Agarwood and processed and re-exported Agarwood products. As market regulations have been in place since time immemorial, many countries are engaged in the import and re-export of Agarwood with marginal domestic markets. As per the available records, Taiwan has imported about 68,43,514 kg of Agarwood from 1994 to 2003. In the later years, the export and import of Agarwood has considerably reduced due to short supply, and the increased price, while the demand has increased by the year.
Agarwood market prices range from 150 to 4,000 USD per kilogram for the wood chips, depending on their quality and origin. Agarwood oil is traded in ‘tola’, which is the equivalent of 11.65 gm. The price of lower grade Agarwood oil starts from as low as 50 USD per tola, while the higher grades cost approximately 200 USD per tola. According to various sources, the annual global trade of Agarwood has been estimated to be in the range of 6 to 8 billion USC. Currently, CITES records show some import and export data, while a large extent of trade has not been recorded.
INDIAN MARKET GRADE & RATES
Though international market prices vary from country to country, depending on their grade and species, quality specifications are the same everywhere. Chips and flakes are sold in the retail market in attractive names. For instance, grades such as Double A (AA) and Triple A (AAA) are prevalent, and their retail prices are also always higher than that of the normal grades.
In retail stores, Agar oil and attar rates depend on brands. Agar oil is traded on tola basis, where one tola is equal to 11.65 gm. Different grades of Agarwood oil will be extracted from the wood depending on the raw materials used, and their quality. For the low grade oil, the price start from Rs 1,500 per tola, while the higher grade of oud oil, extracted from the infected wood, is sold for about Rs 7,000 to 8,000 per tola, and the superior grade oil is sold for over Rs 15,000 per tola in the local market.
The price of Agarwood chips varies depending on its quality. While low grades of Agarwood chips may sell at Rs 5,000 to 15,000 per kg, normal grade chips cost anything from Rs 25,000 to 75,000 per kg, and fine quality, black-coloured sinking superior grades of chips may cost over Rs 1,50,000 per kg.
Lower grades of Agarwood powder are the ingredients for superior quality incense sticks, for which India is one of the key markets.
For the Agarwood produce from the North Eastern states, the price was fixed by the government (before 1998). This price was at the site of supply, and the prices were always slightly high in Mumbai where it was actually exported. Agarwood is expensive since the last decade.
| Grade | 1993 | 1994 | 1998 |
|---|
GOVERNMENT REGULATIONS
Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is the international organisation whose aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival in order to conserve Agarwood trees naturally growing in the forests, Agarwood trees have been included in CITES, which restricts the illegal trade and export of Agarwood, and protects it under its strict regulations. International attention was drawn to the status and trade of Agarwood in the year 1994, when the Government of India submitted a proposal to include it in Appendix II of the CITES. The proposal was accepted during the Ninth Meeting of the Conference of the Parties to CITES, the listing taking effect from 16 February 1995.
As the Agarwood tree population in India has risen due to the domestication of species both in the Northeast and the southern parts of India, the CITES regulation is in the process of getting changed, and export permits and CITES certifications are expected to come into force by the end of 2020.
Since 1991, the export of Agarwood has been prohibited when the export of all Agarwood products including logs, timber, chips, powder, flakes, dust etc., were banned through the EXIM policy in force at that time. The current EXIM policy (1993-2002), published by the Directorate General of Foreign Trade, Government of India, permits the import of Agarwood in different forms including chips, dust and oil. However, the policy maintains the 1991 blanket export ban on Agarwood products grown and harvested in India.
The Negative List of Export of Plants also specifically regulates the export of Agarwood. The Negative List of Export of Plants (as set forth in Notification No. 24 (RE-98)/1997-2002 dated 14 October 1998) being an amendment to the ITO (HS) Classification of Export and Import Items 1997-2002, specifically prohibits the export of Agarwood. The products include plants, plant portions, chips and oil obtained from the forest. The export ban on Agarwood species was re-communicated to parties by way of CITES Notification No. 1999/39.
There are exceptions to the export ban, however, which allow the export of native species included in the Negative List. These include formulations, which are defined as products containing plant portions or extracts in unrecognisable and physically inseparable forms. Native Agarwood can therefore be freely exported in forms such as oil or medicine.
Also, the export of Agarwood cultivated in the farmlands of India is permitted when accompanied by a Certificate of Cultivation obtained from the Regional Deputy Director of Wildlife or the Chief Conservator of Forests or Divisional Forest Officers of particular states.
Agarwood may be re-exported as value-added herbal products if they are manufactured only from imported material. At the time of export, exporters are required to present an affidavit to the Customs authorities stating that only imported plant materials were used to produce the formulation being re-exported.
The processing units in Assam are required to be licensed by the Commerce and Industry Department. But in reality, in Assam, the Industry Department does not liaise with the Forest Department regarding this. It is not mandatory for processing units to declare their source of supply, which actually comes from only cultivated farms.
ILLEGAL HARVESTS & TRADE
Due to the illegal harvesting of Agarwood over the past 3 to 4 decades, the number of Agarwood trees growing naturally in the Northeast and other states has drastically declined. To curb illegal harvesting, the Forest Department and the other enforcement agencies have brought in place a couple of regulations, and issue permit. The harvesting and transportation of logs to the processing centres required transport permit in Assam. However, getting such permits is a hectic task. Therefore, distillers have started bribing the local authorities to transport and process the material without valid permits.
The export ban on Agarwood dropped the historical trade of Indian Agarwood, forcing buyers from other countries, especially the Middle East, to shift their purchase to other Asian countries. However, large quantities of Agarwood material were sent to these countries in the form of processed chips through the surrounding countries, especially Bangladesh. Small quantities of wood can be taken in the personal baggage, too. Also, wood can be couriered to the intended destination through parcel services.
It’s been alleged that Agarwood was smuggled across the North Eastern border, particularly from Myanmar and other surrounding countries in the eastern region. Manipur is one such preferred entry point, particularly Churachandpur, which is the key area to obtain a Transit Permit illegally for the wood smuggled. Illegally transported wood comes to Kolkata, Chennai, Mumbai and Delhi from Southeast Asian countries such as Indonesia, Lao PDR, Cambodia and Vietnam. Some traders admitted to illegally export Agarwood, stating that this was a relatively risk-free process since the Customs formalities were easily negotiated.
Most of the Agarwood smuggled into India is finally moved for processing at Hojai and other surrounding places. There are several reports of seizures, both from traders, and the government. in order to conserve Agarwood trees growing naturally in the forests, they have been included in the CITES, which restricts the trade and export of Agarwood illegally. Currently, documentation and NDF studies are in progress to enable exports with a valid CITES permit, which is expected to come into force by the end of 2020.
Wood Of Gods
For ages, tribals observed the production of Agar, used the produce, conserved the plant variety, and called it the ‘Wood of Gods’. In fact, in India’s religious and social sectors, agarbathis and oudhbathis are used more than sandalwood.
Fragrance of Nirwana
The followers of Buddha believe that the burning of Agarwood and taking in its aroma helps one reach the ultimate stage of meditation, and hence use it accordingly. In the very words of Buddha, “The aromatic fragrance of Agar takes one to the stage of nirvana.”
Historical Uses of Agarwood
- It is extensively mentioned in the Vedas as a favourite of Lord Krishna.
- It has been sought after for ages for its fragrance in religious ceremonies, and its incense is believed to have been burned at the burial of Jesus Christ.
- In Genesis, Agarwood is mentioned as the only tree from which Adam and Eve could take cuttings.
- Prophet Mohammed is believed to have used Agarwood to perform fumigation ceremonies, a practice which is continued till today.
- Religious texts were written on the bark from Agar trees, as referred by Srimanta Sankardev in one of the oldest religious Hindu texts.
- The word ‘aloes’, which means Agarwood, is mentioned in the works of the Sanskrit poet, Kâlidâsa, dating back to 4th to 5th century CE.
- The use of Agarwood in the prescription of traditional Chinese medicine had also been recorded in the 5th to 6th century.
- It has found a mention in the 8th century tomes of Sahih Muslims.
- The word ‘aloes’ has been mentioned several times in the Old Testament.
- Hebrews have referred to Agarwood as ‘ahaloth’ or ‘ahlim’.