Global Agarwood Chip Market Size, Share, Growth Analysis By Nature (Conventional, Organic), By Applications (Oil Production, Incense and Fragrance, Others), By Distribution Channel (Indirect Channels, Direct Channel), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Statistics, Trends and Forecast 2025-2034

Report Overview

The Global Agarwood Chip Market size is expected to be worth around USD 91.3 Billion by 2034, from USD 43.9 Billion in 2024, growing at a CAGR of 7.6% during the forecast period from 2025 to 2034.

The Agarwood Chip Market is a specialized sector within the fragrance, incense, and medicinal industries. Agarwood chips are derived from the Agarwood tree, also known as Aquilaria, which produces aromatic heartwood when infected by a specific fungus. The resulting wood is highly valued for its fragrance, making it a key component in perfumes, incense, and traditional medicines.

Globally, the Agarwood Chip Market has experienced steady growth due to increasing demand in various industries. The rising popularity of natural incense and essential oils, particularly in regions such as Southeast Asia, is propelling this growth.

Additionally, the market is seeing substantial demand from luxury fragrance brands that use agarwood in their high-end product lines. According to Volza, Vietnam, Indonesia, and India are the top three exporters of Agarwood Chips, with Vietnam leading the way with 2,763 shipments, followed by Indonesia with 782 shipments, and India in third place with 510 shipments.

A significant growth opportunity in the Agarwood Chip Market lies in the expansion of sustainable farming practices. The average yield from a single Agarwood tree is approximately 4 kg, and after around 10 years of planting, each tree can yield between 30-40 kg of agarwood. This presents an opportunity for farmers to meet increasing demand while ensuring sustainable practices that can protect this valuable resource. As the demand for organic and ethically sourced products rises, this market segment is positioned for further expansion.

Government investment and regulations are becoming more prominent in the Agarwood Chip Market. Several countries, including Vietnam and India, are focusing on regulating the cultivation and trade of Agarwood. This is essential to prevent over-harvesting and ensure the long-term sustainability of agarwood forests. Moreover, regulations aimed at promoting sustainable farming and fair trade practices are likely to attract more investors and industry stakeholders to the market.

With the global fragrance industry expanding and the increasing adoption of natural wellness products, the Agarwood Chip Market is expected to witness continued growth. This growth will be driven by both traditional markets and emerging opportunities in luxury consumer goods and wellness sectors.

Key Takeaways

• The global Agarwood Chip Market size is projected to reach USD 91.3 Billion by 2034, growing from USD 43.9 Billion in 2024, at a CAGR of 7.6%.
• In 2024, Conventional cultivation methods led the market with a 69.8% share in the By Nature segment.
• Oil Production dominated the By Applications segment in 2024, driven by the growing demand for agarwood oil in perfumes and wellness products.
• Indirect Channels held the largest share in the By Distribution Channel segment in 2024, benefiting from established retail and online networks.
• North America accounted for 40.5% of the global Agarwood Chip Market, valued at USD 17.5 Billion, driven by demand for premium fragrances and supportive trade regulations.

Nature Analysis

Conventional holds a dominant position with 69.8% share in 2024, driven by traditional cultivation methods and market familiarity.

In 2024, Conventional held a dominant market position in the By Nature Analysis segment of the Agarwood Chip Market, with a significant 69.8% share. This dominance can be attributed to the traditional cultivation methods that have been in place for decades, ensuring a stable supply of Agarwood chips. Conventional methods are widely recognized for their reliability and long-standing history in the industry, making them the preferred choice among many consumers.

On the other hand, the Organic segment, while gaining traction, accounted for a smaller portion of the market. Organic Agarwood chips are becoming increasingly popular due to their environmentally friendly cultivation methods. However, they still represent a niche market compared to conventional methods, which continue to dominate. Despite the growth of organic alternatives, conventional methods remain the cornerstone of the Agarwood chip industry.

Applications Analysis

Oil Production holds a dominant position in 2024, driven by high demand in fragrance and wellness products.

In 2024, Oil Production held a dominant market position in the By Applications Analysis segment of the Agarwood Chip Market, driven by its wide usage in the production of agarwood oil. This application accounts for a substantial portion of the market due to the growing demand for essential oils in perfumes, cosmetics, and wellness products. Agarwood oil is highly valued for its rich, aromatic fragrance and therapeutic properties.

Incense and Fragrance also play a vital role in the Agarwood chip market, but its share is comparatively smaller than oil production. This segment continues to benefit from cultural and religious practices, where incense is burned for ceremonial purposes. The demand in fragrance applications remains steady, though it is not as dominant as oil production. Other applications account for a minimal share, mainly focusing on niche markets and unique uses for Agarwood chips.

Distribution Channel Analysis

Indirect Channels hold a dominant market position , driven by established retail and online distribution networks.

In 2024, Indirect Channels held a dominant market position in the By Distribution Channel Analysis segment of the Agarwood Chip Market. This segment, accounting for the largest share, benefits from well-established retail and online distribution networks that provide widespread access to consumers. Indirect channels, including wholesalers, distributors, and e-commerce platforms, have made Agarwood chips more accessible to a broader audience.

Direct Channels, while contributing to the market, accounted for a smaller portion of the market. Direct sales typically cater to niche markets and specialty stores, focusing on more personalized customer interactions. However, the reach of direct channels is limited compared to the extensive network of indirect channels. This imbalance underscores the importance of indirect channels in the continued growth and accessibility of the Agarwood chip market.

Key Market Segments

By Nature

• Conventional
• Organic

By Applications

• Oil Production
• Incense and Fragrance
• Others

By Distribution Channel

• Indirect Channels
• Direct Channel

Drivers

Increasing Demand for Luxury Fragrances Drives Market Growth

The global agarwood chip market is seeing significant growth due to the rising demand for high-end and luxury fragrances. Agarwood chips, known for their rich and complex aroma, are widely used in perfumes, especially in premium and niche fragrance lines. Consumers are showing a growing interest in unique and exotic scents, making agarwood a sought-after ingredient.

Another major driver is the rising preference for natural and organic products. Consumers are becoming more conscious about the ingredients in their personal care and wellness products. As agarwood chips are naturally sourced, they align with this shift toward clean and sustainable choices. This trend is especially strong in Asia, the Middle East, and parts of Europe.

In addition to fragrances, agarwood chips are widely used in traditional medicine. Countries like China, India, and Japan use agarwood in traditional healing practices for its calming and therapeutic properties. As people turn to alternative and natural health remedies, this is creating new demand for high-quality agarwood.

Overall, the combination of luxury appeal, natural sourcing, and medicinal value is fueling the growth of the agarwood chip market. These factors are expected to support steady market expansion over the coming years.

Restraints

Deforestation and Overexploitation of Agarwood Trees Restrain Market Growth

One of the main challenges facing the agarwood chip market is the overharvesting of agarwood trees. Agarwood forms when the Aquilaria tree becomes infected or injured, which takes years. Due to high demand, these trees are often cut down before they can produce enough resin, leading to environmental degradation and scarcity of raw materials.

The issue of deforestation is critical. As forests are cleared or illegally logged to obtain agarwood, it threatens biodiversity and contributes to habitat loss. Several species of Aquilaria are now endangered, which has prompted stricter regulations and trade restrictions. These environmental and legal issues make it difficult for suppliers to maintain a steady flow of agarwood chips.

Another significant restraint is the high cost of agarwood. Because of its rarity and slow production process, agarwood is one of the most expensive raw materials in the fragrance industry. This high cost limits its use to luxury markets and restricts wider adoption in mass-market products.

Together, environmental concerns and high prices create strong barriers for the agarwood chip market. Without sustainable cultivation methods and cost-effective processing, market growth may slow in the future.

Growth Factors

Rising Demand for Agarwood in the Wellness and Aromatherapy Sectors Drives Market Growth

The growing interest in wellness and aromatherapy is opening new opportunities for the agarwood chip market. Consumers are increasingly looking for products that offer mental and emotional well-being, and agarwood is known for its calming and soothing effects. Its use in incense, meditation, and relaxation rituals is gaining popularity, especially in urban and high-stress environments.

Agarwood is also finding growing demand in the cosmetics industry. Natural skincare and luxury personal care brands are exploring agarwood for its potential benefits and unique scent. As brands seek rare and valuable ingredients to differentiate their products, agarwood chips are becoming more appealing in product development.

Another opportunity lies in the growth of e-commerce. Online platforms have made it easier for consumers to discover and purchase agarwood products directly from sellers, including international markets. This digital reach helps smaller producers and brands connect with a global customer base, increasing accessibility and boosting overall sales.

These trends reflect changing consumer lifestyles and purchasing habits. With the growing demand for wellness, premium personal care, and online convenience, the agarwood chip market is well-positioned for future growth.

Emerging Trends

Innovations in Agarwood Processing Techniques Drive Market Growth

Recent innovations in processing techniques are transforming the agarwood chip market. Traditionally, agarwood was harvested through natural infection, which took many years. Today, modern techniques such as artificial inoculation allow producers to generate agarwood faster and more efficiently. These methods are helping meet growing demand while reducing pressure on wild Aquilaria trees.

Another trending factor is the shift toward eco-friendly packaging. As consumers become more environmentally conscious, brands are adopting sustainable materials for packaging agarwood products. This shift not only appeals to green-minded buyers but also strengthens brand reputation and aligns with global sustainability goals.

Agarwood is also making a strong entrance into the luxury market beyond perfumes. It is now being used in premium candles, soaps, and home fragrance items. These high-end products cater to consumers seeking exclusivity and quality, further elevating agarwood’s position in the global market.

Together, these trends highlight a maturing and innovative market. By focusing on sustainability, advanced production, and luxury positioning, the agarwood chip industry is adapting to meet modern consumer expectations while ensuring long-term growth.

Regional Analysis

North America Dominates the Agarwood Chip Market with a Market Share of 40.5%, Valued at USD 17.5 Billion

North America holds the leading position in the global agarwood chip market, accounting for a 40.5% share and valued at USD 17.5 Billion. The region’s dominance is attributed to the increasing demand for premium fragrances and incense products, coupled with growing consumer awareness regarding natural and therapeutic ingredients. Furthermore, supportive trade regulations and robust distribution networks contribute to the market’s steady expansion across the U.S. and Canada.

Asia Pacific Agarwood Chip Market Trends

Asia Pacific remains a significant market for agarwood chips due to traditional use in cultural and religious practices across countries like India, China, and Southeast Asia. The region benefits from native agarwood tree cultivation, which supports local production. Rising disposable incomes and increasing preference for natural and exotic scents are further fueling market demand.

Europe Agarwood Chip Market Trends

Europe’s agarwood chip market is growing steadily, driven by heightened interest in aromatherapy, perfumery, and holistic wellness. Consumers are increasingly opting for sustainable and rare botanical products. Import activity and product innovation in the fragrance industry are enhancing the market’s visibility across key countries such as France and Germany.

Middle East and Africa Agarwood Chip Market Trends

The Middle East and Africa represent a promising market for agarwood chips, especially in Gulf countries where oud-based products are deeply rooted in the culture. High-end demand for luxury incense and perfumery, combined with increasing retail investments, is bolstering growth. Traditional practices and regional festivities further drive market uptake.

Latin America Agarwood Chip Market Trends

In Latin America, the agarwood chip market is emerging with growing awareness of natural products and alternative therapies. While still developing, the region is witnessing increased importation and niche market interest. Urban centers are driving demand through specialty stores and wellness-focused product offerings.

Key Regions and Countries

North America

• US
• Canada

Europe

• Germany
• France
• The UK
• Spain
• Italy
• Rest of Europe

Asia Pacific

• China
• Japan
• South Korea
• India
• Australia
• Rest of APAC

Latin America

• Brazil
• Mexico
• Rest of Latin America

Middle East & Africa

• GCC
• South Africa
• Rest of MEA

Key Agarwood Chip Company Insights

In the global Agarwood Chip Market, several key players are poised to influence market dynamics in 2024, shaping the competitive landscape.

Arista Agarvina Co. Ltd. has established itself as a prominent player with a strong focus on the sustainable production and export of high-quality agarwood products. Their commitment to quality and eco-friendly harvesting methods enhances their market reputation.

Sai Export India stands out for its extensive network and well-established supply chain, offering a variety of agarwood products worldwide. Their reputation for consistency and reliability has enabled them to capture a significant market share.

Myanmar Treasure Co-op Ltd. is known for its direct sourcing from Myanmar’s abundant agarwood resources. Their focus on maintaining high-quality standards and fostering local partnerships contributes to their prominence in the global market.

K.A.B. Industries has earned recognition for its innovative processing techniques that enhance the aromatic quality of agarwood chips. Their research and development-driven approach allows them to meet the growing demand for premium products in various markets.

These companies represent a diverse and competitive force in the Agarwood Chip Market, each contributing uniquely through their strategic initiatives.

Top Key Players in the Market

• Sai Export India
• Myanmar Treasure Co-op Ltd.
• K.A.B. Industries
• Green Agro Sadaharitha Plantations Limited
• BINH NGHIA AGARWOOD CO., Ltd.
• Hoang Giang Agarwood Ltd
• ASSAM AROMAS
• Asia Plantation Capital Pte Ltd.
• Lao Agar International Development
• NHANG THIEN JOINT STOCK COMPANY
• THE MJI GROUP

Recent Developments

• In January 2025, D2C fragrance startup House of EM5 plans to achieve Rs 24 crore in revenue by the end of the fiscal year. The company aims to expand its presence and consumer base across multiple channels in a competitive market.
• In February 2025, Lake & Skye’s founder shared insights about their acquisition by Tru Fragrance, marking a significant milestone for the brand. The move is expected to strengthen Lake & Skye’s reach and portfolio in the fragrance industry.
• In April 2024, Mane, a global leader in the fragrance and flavor industry, acquired Avoca, a US-based specialist in fragrance fixatives. This acquisition enhances Mane’s capabilities in providing long-lasting scent solutions for the market.

Report Scope