When one stumbles across something as special and revolutionary as Agarwood, it rarely remains a secret for very long. If something comes along and flips everything on its head, changing the market entirely and reshaping people’s ideas of what that market could be, everyone will want to get their hands on it. It’s basic knowledge and yet you have to wonder why this is. And in the case of Oud Oils, there are various answers to this looming question. And if we dig into these reasons, we will find that the sheer nature of Agarwood lends itself to more than meets the eye.
First off, it is no secret that Agarwood is used to make some of the most exotic and unforgettable fragrances to come out of Asia. This is a fact that goes without saying. But what some don’t realize is that those aromas can be used for more than just squirting on your neck to make you smell good. Agarwood has been referred to as “The Green Gold Mine”, and not just because the aromas smell nice. Oud Oils are used in religious practices, and are also considered to be highly detoxifying and are used to help with stomach pains. And it doesn’t stop at fragrances either. Agarwood can also be carved, and has been used to make statues, as well as beads . Many western companies that have a stake in the fragrance department have dipped their cups into the Oud Oil well. Companies such as Calvin Klein, Nina Ricci, Yves Saint Laurent, Tom Ford Oud Wood, Juicy Couture, and Dior Fahrenheit have all used Oud as their base oil and have been profiting from it ever since.
The biggest issue that cropped up was the yield of Agarwood. The Aquilaria is a species of tree from which Oud is produced. When it is infected with a bacterium, it promotes the production of the resin within the heartwood of the tree. This is what is used to produce Oud Oils. But this infection only occurs naturally within the trees between 5-15% of the time, and when it does, it takes about fifty years to produce the best yield. Of course, with such a high demand and a slow rate of product yield, it was only a matter of time until illegal harvesting of Aquilaria trees forced it onto the endangered species list.
This over-harvesting of the Aquilaria is what drew the attention of CITES, or Convention for International Trade in Endangered Species. Luckily, they stepped in before the Aquilaria went extinct, but the prices still remain high. The highest quality have been known to be sold for $50,000 per liter . But the question is: Why is this relevant and how do these restrictions and prices fit in to the multitude of companies that wish to invest in Agarwood?
A new investment opportunity has presented itself. An opportunity that allows investors to start gaining returns seven years after the purchase date of their trees. This is a far cry from the fifty years it takes the Aquilaria tree to produce the resin, not to mention the miniscule chance it has at becoming infected with the bacteria in the first place. But how is such a promise and opportunity even possible? Well, a new innovation has come about that allows for artificial inoculation of the bacteria into the tree that skyrockets that paltry 5-15% chance of a resin producing infection to a staggering 99% chance. At that point, it’s plain old unlucky not getting Agarwood within seven years time. This process requires the Aquilaria tree to be five years old and reduces the time to produce resin to two years, creating a much more sustainable market for Oud Oils.
This transforms that market for Oud Oils from a risky long-term investment to a medium-term investment that many more businesses can, and will, get behind. While choosing where one should invest their money is usually no easy choice for a company, when it comes to Oud Oils, it’s rarely a matter of “if” they should invest. It’s only a matter of when and how much they should invest in. With these new technologies takes almost a seventh of the time to produce the resins necessary to produce Oud Oils. This is monumental in the field of Agarwood. And much like Oud Oils itself, it is revolutionary. The astronomical prices caused by a high demand and low production is starting to give way to a more reasonable amount, all thanks to this new inoculation innovations. Now Oud Oils can corner the market even harder than it has before and a great very many companies are taking notice and stepping up to claim a piece of the Agarwood pie. And that number will only increase exponentially.