Agarwood Essential Oil Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The market for Oudh essential oil is expected to grow at a significant rate, with a current value of $ 264 million in 2024, which is expected to reach $ 435 million by 2032. The growth rate is 6.35%. The rising demand for natural and organic products, especially in the perfume and aromatherapy industries, is the main reason for this growth. In addition, the demand for sustainable and ethically derived essential oils is growing as consumers become more aware of their health and the environment. Further growth is driven by technological advances in extraction methods and the growing popularity of aromatherapy. Supercritical CO2 extraction improves the quality and yield of Oudh oil, reducing its price and making it more accessible to manufacturers. This has encouraged the market and its leading players, such as Oudh Industries, Inc. and Al Haramain Perfumes, to launch new products and enter strategic alliances to take advantage of this growing trend. This has also led to an increase in the production of sustainable and ethically derived Oudh oil, which is in line with the growing demand for natural and eco-friendly products. The Oudh essential oil market is expected to grow significantly in the coming years, driven by changing consumer trends and technological advances.

Regional Market Size

Regional Deep Dive

The agarwood essential oil market is experiencing a high growth rate across various regions, owing to the increasing awareness of natural and organic products among consumers, as well as the increasing demand for aromatherapy and personal care products. North America and Europe have a strong preference for sustainable and ethical agarwood essential oil production, while Asia-Pacific is a significant producer and consumer, owing to its long-standing cultural ties to agarwood. The Middle East and Africa are experiencing a growing luxury fragrance market, which is expected to boost the demand for agarwood essential oil, which is often associated with high-end products. Latin America is emerging as a new market, owing to its increasing interest in natural products.

Europe

• European markets are seeing a rise in the popularity of natural and organic personal care products, with brands like L'Occitane incorporating Agarwood essential oil into their offerings to appeal to eco-conscious consumers.
• The European Union's stringent regulations on essential oils are encouraging companies to invest in quality assurance and sustainable sourcing, which is expected to enhance the overall market credibility.

Asia Pacific

• Countries like India and Vietnam are leading producers of Agarwood, with local companies such as Agarwood Vietnam investing in advanced distillation techniques to improve oil quality and yield.
• Cultural practices in countries like Japan and China, where Agarwood is traditionally used in incense and perfumery, continue to drive demand, leading to innovative product offerings that blend traditional uses with modern applications.

Latin America

• Emerging interest in natural and organic products among Latin American consumers is leading to increased exploration of local sources of Agarwood, with companies like Aroma de la Selva focusing on sustainable harvesting.
• Collaborations between local farmers and international brands are fostering innovation in the extraction and marketing of Agarwood essential oil, enhancing its visibility in the region.

North America

• The trend towards sustainability has led to increased interest in ethically sourced Agarwood, with companies like Agarwood USA focusing on sustainable harvesting practices to meet consumer demand.
• Regulatory changes in the cosmetic and fragrance industries are pushing brands to disclose sourcing practices, prompting companies to invest in transparent supply chains for Agarwood essential oil.

Middle East And Africa

• The luxury fragrance market in the Middle East is booming, with brands like Ajmal and Swiss Arabian incorporating Agarwood essential oil into their high-end perfumes, reflecting the region's cultural affinity for this ingredient.
• Government initiatives in countries like Oman are promoting the cultivation of Agarwood trees, aiming to boost local economies and ensure sustainable production practices.

Did You Know?

“Agarwood essential oil is one of the most expensive oils in the world, with prices reaching up to $10,000 per kilogram, primarily due to its rarity and the complex process required for its extraction.” — International Journal of Essential Oil Research

Segmental Market Size

The essential oil of Oudh plays an important part in the market for fragrances and aromatherapy, which are both growing steadily as a result of the growing interest of consumers in natural and organic products. The odour of Oudh is a comparatively new one, and is in its effect on the senses, the result of the blending of the two odours which have been traced back to the time of the Prophet. The use of natural ingredients is encouraged by the regulations. The essential oil of Oudh has now reached the stage of maturity where it is produced and distributed by the most important companies, Aftelier and Oudh India. The most important uses are in perfumes, incense and therapeutic oils, particularly in the Middle East and Southeast Asia, where the traditional uses are so strong. The development of the market is further encouraged by the growing interest in sustainable agriculture and the rise in holistic health. Technological developments, such as supercritical CO2 extraction, are improving the quality and yield of the product.

Future Outlook

The agarwood oil market is expected to grow from $265 million to $435 million between 2024 and 2032, with a CAGR of 6.35 percent. The increase is attributed to the growing popularity of agarwood oil in aromatherapy and personal care products. The demand for natural and organic products is expected to increase further, and agarwood oil is expected to reach a 15 percent penetration level in the fragrance, cosmetics and personal care industries by 2032. Also, the cultivation of agarwood is expected to increase due to the agarwood harvesting method, which can solve the problem of deforestation. The use of agarwood oil in cosmetics and toiletries will also increase. The trend of using eco-friendly products will also help the market. The trend of combining agarwood oil with luxury products and the rise of e-commerce will also play an important role. Agarwood oil will grow due to the demand for consumers and the innovation of industry players.