Global Agarwood Essential Oil Market Growth, Share, Size, Trends and Forecast (2025 - 2031)

• In May 2020, Firmenich completed the acquisition of Les Derives Résiniques et Terpeniques, a global leader in developing and supplying high-quality, renewable, and naturally derived ingredients. This acquisition would position Firmenich as a leader in renewable ingredients for perfumery and other applications.

• In October 2020, dôTERRA announced several new essential oil products and diffusers and three new wellness programmes to help people focus on their specific health goals.

The Global Agarwood Essential Oil Market is segmented by Category, Raw Material, and Application, each reflecting different consumer demands and preferences across industries. The Category segmentation into Conventional and Organic highlights the growing trend toward natural and sustainable products. Conventional agarwood essential oils are derived using traditional methods, often involving chemical treatments or solvents to enhance oil extraction. This category remains popular in industrial applications where cost and volume are prioritized. On the other hand, the Organic segment is seeing a surge in demand as consumers become more health-conscious and environmentally aware. Organic agarwood oils are produced without the use of synthetic chemicals, making them highly sought after in the personal care and wellness industries, where clean-label products are a significant trend.

The Raw Material segmentation of Wood, Flowers, Bark, and Resin defines the various sources of agarwood essential oils, each with distinct characteristics. Wood remains the dominant raw material for agarwood essential oil production, with the heartwood of the agarwood tree providing the richest and most aromatic oils. This material is highly valued for its consistency and depth of fragrance, which makes it suitable for high-end perfumes and luxury products. Flowers offer a lighter, more delicate fragrance, and while they are not as widely used as wood, they cater to niche markets. Bark and Resin are also utilized, with Resin being particularly prized for its intense, deep scent, making it ideal for premium and artisanal products. The variety in raw materials ensures a diverse range of products that can meet different consumer preferences for fragrance intensity and quality.

The Application segment further diversifies the market, with significant demand coming from Personal Care, Aromatherapy, Pharmaceuticals, and Air Care. In Personal Care, agarwood essential oils are valued for their moisturizing, anti-inflammatory, and antimicrobial properties, leading to their inclusion in skincare, haircare, and body care products. The Aromatherapy segment has seen growing interest, as agarwood oil is known for its calming and grounding properties, making it popular in essential oil diffusers, massage oils, and relaxation products. In the Pharmaceuticals sector, agarwood essential oils are used for their potential medicinal benefits, including their antioxidant and anti-inflammatory effects. Lastly, the Air Care segment utilizes agarwood oils in air fresheners and diffusers, capitalizing on their pleasant and long-lasting fragrance. Together, these application areas highlight the versatility and appeal of agarwood essential oils across various industries, driving the market's growth.

Global Agarwood Essential Oil Segment Analysis

In this report, the Global Agarwood Essential Oil Market has been segmented by Category, Raw Material, Application, and Geography.

Global Agarwood Essential Oil Market, Segmentation by Category

The Global Agarwood Essential Oil Market has been segmented by Category into Conventional and Organic.

Conventional agarwood essential oil is produced using traditional cultivation and extraction methods, often involving the use of chemical fertilizers and pesticides to maximize yield and control pests. This category typically encompasses a larger share of the market due to its lower production costs and broader availability. Conventional agarwood oil is widely used in the fragrance industry, where consistency in aroma and cost-effectiveness are critical factors driving demand. It is also prevalent in traditional medicine practices, catering to a diverse range of health and wellness applications globally.

Organic agarwood essential oil is produced without the use of synthetic chemicals, pesticides, or fertilizers, adhering to stringent organic farming standards and practices. This segment appeals to consumers seeking natural and sustainable products, free from potentially harmful residues and with a lower environmental impact. Organic agarwood oil is increasingly favored by discerning consumers in markets such as North America, Europe, and Asia Pacific, where demand for certified organic ingredients is on the rise across fragrance, cosmetic, and wellness sectors. The organic certification assures consumers of product purity and adherence to sustainable agricultural practices, aligning with growing trends towards ethical sourcing and eco-friendly production methods.

Global Agarwood Essential Oil Market, Segmentation by Raw Material

The Global Agarwood Essential Oil Market has been segmented by Raw Material into Wood, Flowers, Bark, and Resin.

The Global Agarwood Essential Oil Market is segmented by Raw Material into Wood, Flowers, Bark, and Resin, each contributing uniquely to the production of high-quality essential oils. Wood is the most commonly used raw material for extracting agarwood essential oil. The heartwood, especially from agarwood trees infected with mold, produces a highly aromatic oil. This segment is the primary source due to the availability of mature trees, which yield the best quality oil. As demand for agarwood oil rises, the focus on sourcing and sustainable harvesting practices for wood has become increasingly important.

The Flowers segment, although less common, offers a unique and delicate fragrance profile for agarwood essential oils. Agarwood flowers are typically harvested from specific tree species and are known for their mild and pleasant aroma, which appeals to consumers seeking lighter, floral notes. While less prevalent than wood, flower-derived essential oil is gaining interest in niche markets for its aromatic properties and potential therapeutic uses. This segment is seen as a premium offering, catering to high-end fragrance and wellness products.

The Bark and Resin segments are specialized raw materials for agarwood oil production. The Bark of the agarwood tree is sometimes used in oil extraction, though it is less commonly employed compared to wood or resin due to its lower oil yield and weaker fragrance. Resin, on the other hand, is one of the most prized components of the agarwood tree. Resin-rich agarwood trees produce a resin that is highly aromatic and can be used to create potent essential oils. The resin segment is important for its high concentration of essential oils, offering a more intense fragrance that appeals to luxury and high-quality product markets. These segments cater to the demand for premium agarwood oils used in high-end perfumes, aromatherapy, and wellness products.

Each raw material segment—wood, flowers, bark, and resin—plays a critical role in the diversity of the Global Agarwood Essential Oil Market, serving different consumer preferences and market niches. The wood and resin segments dominate in terms of volume and yield, while the flower and bark segments cater to more specific, premium applications. The market continues to evolve with increasing interest in sustainable and ethical sourcing, ensuring that all raw materials used in agarwood oil production meet environmental and regulatory standards.

Global Agarwood Essential Oil Market, Segmentation by Application

The Global Agarwood Essential Oil Market has been segmented by Application into Personal Care, Aromatherapy, Pharmaceuticals, and Air Care.

In the personal care sector, agarwood essential oil is highly valued for its distinctive fragrance and potential skincare benefits. It is used in a variety of products, including perfumes, soaps, creams, and lotions, where its rich, woody aroma provides a luxurious sensory experience. Additionally, its reputed antimicrobial and anti-inflammatory properties make it a sought-after ingredient in skincare formulations aimed at soothing and revitalizing the skin, promoting a healthy and radiant complexion.

In aromatherapy, agarwood essential oil is renowned for its grounding and calming effects, making it a popular choice for stress relief and mental relaxation. It is often used in diffusers, massage oils, and bath products to help alleviate anxiety, promote emotional balance, and enhance meditation practices. The complex, soothing aroma of agarwood oil is believed to have a profound impact on the mind and body, making it a staple in therapeutic blends designed to enhance well-being and create a tranquil atmosphere. The growing popularity of holistic wellness practices and natural remedies continues to drive the demand for agarwood essential oil in aromatherapy.

In the pharmaceutical industry, agarwood essential oil is explored for its therapeutic properties, including its potential antimicrobial, anti-inflammatory, and analgesic effects. It is used in various formulations aimed at treating conditions such as infections, pain, and inflammation. Agarwood oil’s natural compounds are being researched for their efficacy in modern medicine, with applications in developing new treatments and supplements. Lastly, in the air care sector, agarwood essential oil is prized for its ability to purify and fragrance indoor environments. It is commonly used in air fresheners, diffusers, and incense, where its deep, woody scent helps to neutralize odors and create a pleasant, aromatic ambiance, enhancing the overall living and working experience. The demand for natural and long-lasting air care solutions continues to support the growth of agarwood essential oil in this segment.

Global Agarwood Essential Oil Market, Segmentation by Geography

In this report, the Global Agarwood Essential Oil Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East and Africa and Latin America.

Global Agarwood Essential Oil Market Share (%), by Geographical Region, 2024

North America and Europe are projected to remain prominent markets for agarwood essential oil, driven by a growing consumer inclination towards natural and exotic fragrances in the luxury segment. The demand in these regions is bolstered by a strong presence of high-end perfumeries, spas, and wellness centers that cater to affluent demographics seeking unique and premium aromatics. Regulatory support for sustainable sourcing practices and increasing consumer awareness of the therapeutic benefits of agarwood oil are further expected to contribute to market expansion.

Asia Pacific, historically the largest producer and consumer of agarwood essential oil, is anticipated to maintain its leadership position throughout the forecast period. Countries like India, Malaysia, Thailand, and Indonesia are key contributors to the market, leveraging their traditional expertise in agarwood cultivation and extraction. The region's robust demand is driven by cultural and religious practices that value agarwood for its spiritual and therapeutic properties. Additionally, rising disposable incomes and urbanization are fueling the adoption of agarwood oil in personal care and air care products, further boosting market growth.

In the Middle East and Africa, and Latin America regions, the agarwood essential oil market is poised for steady growth, supported by increasing consumer awareness and rising disposable incomes. These regions are emerging markets for luxury fragrances and natural wellness products, where agarwood oil's exotic appeal and cultural significance contribute to its growing popularity. Government initiatives promoting sustainable agriculture and export opportunities are expected to drive production and supply chain developments, enhancing market accessibility and competitiveness.

This report provides an in depth analysis of various factors that impact the dynamics of Global Agarwood Essential Oil Market. These factors include; Market Drivers, Restraints and Opportunities Analysis.

Drivers, Restraints and Opportunity Analysis

Drivers

• Growth in Aromatherapy and Spa Industries
• Rising Disposable Income in Emerging Markets
• Awareness about Therapeutic Benefits of Agarwood Oil

• Expansion of Online Retail Channels - The expansion of online retail channels represents a significant opportunity for the agarwood essential oil market, leveraging the growing trend towards e-commerce and digital consumer engagement. As more consumers turn to online platforms for purchasing personal care and wellness products, including essential oils, companies in the agarwood sector can capitalize on this shift by enhancing their digital presence and distribution strategies.

  Online retail offers agarwood oil suppliers and manufacturers a broader reach to global markets, enabling them to connect directly with a diverse consumer base. E-commerce platforms provide a convenient avenue for consumers to explore and purchase agarwood products from the comfort of their homes, bypassing traditional retail constraints such as geographic limitations or physical store availability. This accessibility can stimulate demand and foster brand visibility on a global scale.

  The expansion of online retail channels presents a transformative opportunity for the agarwood essential oil market, enabling companies to reach a wider audience, enhance consumer engagement, and optimize their business strategies in response to evolving market dynamics. By embracing digital innovation and leveraging e-commerce platforms effectively, agarwood oil businesses can drive growth, expand market share, and capitalize on the increasing demand for natural and wellness-oriented products worldwide.

Restraints

• High Cost of Agarwood Oil Extraction
• Regulatory Challenges in Trade and Harvesting
• Threats to Agarwood Trees from Illegal Logging

• Seasonal and Geographical Constraints in Production - Seasonal and geographical constraints in production pose notable challenges for the agarwood essential oil market, impacting both supply consistency and operational planning for manufacturers and suppliers. Agarwood trees, primarily found in tropical and subtropical regions such as Southeast Asia and parts of South Asia, are subject to specific growth conditions and harvesting limitations influenced by climate and environmental factors.

  One significant seasonal challenge in agarwood production is the cyclic nature of resin formation within agarwood trees. Agarwood is formed as a response to certain stress factors, such as fungal infections or physical injury, triggering the tree to produce resinous compounds. This process is not continuous and can vary significantly depending on factors like rainfall patterns, temperature variations, and soil conditions. As a result, the yield and quality of agarwood resin can fluctuate from season to season, posing challenges for consistent production and supply chain management.

  Addressing seasonal and geographical constraints requires strategic planning and adaptive management practices within the agarwood industry. Efforts to mitigate these challenges include implementing sustainable harvesting practices, optimizing cultivation techniques through research and development, and exploring new geographic regions for agarwood cultivation. Collaborative initiatives between governments, conservation organizations, and industry stakeholders can also promote responsible sourcing practices and environmental stewardship, ensuring the long-term viability of agarwood resources while meeting market demands.

Opportunities

• Rising Popularity of Agarwood Oil in Perfumery
• Growing Demand in Personal Care Products
• Expansion into Untapped Geographic Regions

• Increasing Focus on Sustainable Sourcing - The increasing focus on sustainable sourcing within the agarwood essential oil market reflects growing consumer awareness and regulatory scrutiny concerning environmental conservation and ethical practices. As demand for natural products continues to rise, stakeholders in the agarwood industry are under pressure to adopt sustainable practices that support long-term ecological balance and social responsibility.

  Sustainable sourcing of agarwood essential oil involves several key considerations, beginning with responsible harvesting practices. Agarwood trees, which are often slow-growing and susceptible to overharvesting, require careful management to ensure their continued regeneration and conservation. Harvesting practices that prioritize selective extraction methods, respect maturity thresholds, and adhere to seasonal limitations help mitigate the ecological impact on natural agarwood populations.

  The adoption of sustainable sourcing practices in the agarwood essential oil market not only addresses environmental and social concerns but also enhances market competitiveness and consumer trust. Companies committed to sustainability can differentiate their products in a crowded marketplace, appeal to environmentally conscious consumers, and align with regulatory expectations for ethical business conduct. By prioritizing sustainability throughout the supply chain—from forest management to product distribution—stakeholders can foster a resilient and responsible agarwood industry that supports both ecological integrity and socio-economic prosperity for generations to come.

Key players in Global Agarwood Essential Oil Market include :

• Amarnath Exports
• Maruti Natural Fragrances
• Eden Botanicals
• MJI Group
• Treedom Oud
• K.A.B. Industries
• Hoang Giang Agarwood Company
• Shiv Sales Corporation
• Assam Aromas

In this report, the profile of each market player provides following information:

• Company Overview and Product Portfolio
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis