Why Is Agarwood So Expensive?

Agarwood is expensive because it cannot be farmed on demand the way ordinary timber can. A tree has to be wounded, the wound has to trigger a resin response, and that resin has to accumulate for years before the wood becomes usable. Add a long history of overharvesting, an international conservation framework that adds real friction to legal trade, and a grading system where resin content alone can separate a low value piece from a high value one, and you have one of the few raw materials where ordinary chips sell for relatively little while the rarest pieces have been reported selling for the equivalent of millions of dollars per kilogram at auction.

None of these factors works in isolation. They compound, which is part of why agarwood pricing can look so dramatically uneven from one piece to the next, even when two pieces appear similar to an untrained eye.

It Cannot Be Produced on a Predictable Schedule

Most agricultural products scale with land and time. Plant more trees, wait the standard growing period, and yield increases roughly in proportion. Agarwood does not work this way, because the valuable resin is not a normal product of tree growth. It is a defensive response to injury, and not every tree responds the same way even when deliberately wounded.

Plantation growers have developed induction techniques, generally some combination of mechanical wounding, drilling, or inoculating the tree with substances meant to trigger or accelerate a resin response. These methods have made commercial agarwood production possible at meaningful scale, particularly across Vietnam and Indonesia, and plantation-origin material has made up a growing share of the legal global supply since 2017. Even with induction, though, resin formation still takes years rather than months, and the resulting resin is generally considered less developed than resin formed slowly over decades in an undisturbed wild tree. That difference in formation time is one of the clearest dividing lines in the entire market, covered in more detail in our guide to wild versus plantation agarwood.

Genuine Wild Agarwood Is Simply Rare

Even setting plantation material aside, wild agarwood formation is uncommon. The vast majority of mature Aquilaria and Gyrinops trees in the wild never sustain the kind of injury and infection that leads to meaningful resin formation, and among those that do, most produce only a small amount of usable, high-resin material. Harvesters historically had no way to tell from the outside which trees had resinned, which led to widespread felling of trees that turned out to contain little or no usable resin once cut open, a wasteful practice that has contributed to the depletion of wild stock in many regions.

At the extreme end of rarity sits a small category of agarwood known across different trading cultures as kynam, or kyara in Japan, generally understood within the trade to represent the rarest and most aromatically complex resin a tree can produce. Reliable figures on kynam pricing are hard to pin down, since so few transactions happen at this level and most reporting on it comes from individual traders describing specific sales rather than from any standardized market data.

That figure, from a Lao trader interviewed by Al Jazeera, is among the highest publicly attributed to a real, named transaction, and should be read as a description of an exceptional auction-style sale rather than a typical market price. The overwhelming majority of agarwood, including most wild material, sells for a small fraction of that.

This same rarity is also why illegal harvesting remains an ongoing problem in several producing regions, despite decades of CITES regulation. Industry reporting has described authorities in Laos confiscating more than a ton of illegally harvested agarwood in a single year as recently as 2022, an indication that the gap between regulated supply and market demand is still wide enough to sustain unregulated harvesting in some areas. Every illegal shipment that does make it to market adds to the supply of material with no verifiable origin, which both undercuts legitimate sellers on price and makes the authenticity and provenance questions covered in our authenticity guide even more relevant for buyers trying to source responsibly.

Grade Is the Biggest Lever on Price

Within any single origin, grade is usually the single largest factor separating a low price from a high one. Grading generally comes down to resin content, the proportion of the wood that has actually converted to dark, aromatic resin rather than remaining plain wood, along with the depth, evenness, and character of that resin once tested or burned. A chip with light, patchy resin and a faint scent sits at the bottom of the range. A piece with deep, even resin saturation, a complex scent, and enough density to sink in water sits much higher.

Because resin content is somewhat visible but not always obvious, especially once wood has been cut into small chips, grading is also where the market is most exposed to misrepresentation. A seller describing a piece as a higher grade than its actual resin content supports is one of the most common ways buyers overpay, which is why our authenticity guide exists as a dedicated hub rather than a single page. The specific grading systems used by Vietnamese traders and by Middle Eastern oud markets differ from each other in both terminology and structure, and are covered separately in their own guides.

Conservation Status Adds Real Cost to Legal Trade

Every species in the genera Aquilaria and Gyrinops is listed under CITES Appendix II, the section of the international treaty covering species that are not necessarily on the brink of extinction but whose trade needs monitoring and regulation to stay sustainable. In practice, this means a country wanting to export agarwood, whether as raw wood, chips, or oil, generally needs to complete what is called a non-detriment finding, a study showing the proposed level of harvest will not damage the wild population, before issuing export permits at all.

This process has real consequences for both legitimate exporters and for price. India offers a useful recent example. In 2024, following a non-detriment finding study conducted by the Botanical Survey of India, the country secured the removal of its native Aquilaria malaccensis from a CITES list reserved for species facing significant unresolved trade concerns, and received a new export quota effective that April. Producers in countries without an approved non-detriment finding in place can face much greater difficulty exporting legally at all, which pushes some trade into unregulated channels and adds documentation costs and delays for the producers trying to stay compliant. All of this adds friction and cost to legal supply chains, on top of whatever the raw material itself would otherwise cost.

Format Changes the Price Too

The same underlying resin costs different amounts depending on what form it takes by the time it reaches a buyer. Raw chips, distilled oil, and finished products like beads or carved pieces are not priced the same way relative to each other, since distillation and craftsmanship both add labor, equipment, and yield losses on top of the raw material cost.

Oud oil in particular requires a large quantity of agarwood to produce a comparatively small volume of finished oil, since the aromatic compounds make up only a fraction of the wood's total mass and a meaningful portion is lost during distillation itself. This is part of why a small bottle of high quality oud oil can cost as much as, or more than, a much larger quantity of raw chips of similar underlying grade. Distillation method matters too. Producers using slower, more careful soaking and steam distillation processes tend to extract a more complete aromatic profile than faster, high volume methods, and that additional time and equipment cost is generally reflected in the finished oil's price. Buyers comparing chip prices to oil prices directly, gram for gram, are usually comparing two different products with different production economics rather than two versions of the same thing. The practical differences between buying chips and buying oil are covered in our chips versus oil comparison.

Origin Affects Price Independently of Grade

Two pieces of similar grade and resin content do not always sell for the same price, because origin itself carries weight in the market. Vietnamese agarwood, particularly material described as Trầm Hương or the rarer Kỳ Nam, is widely regarded among traders and collectors as commanding some of the highest prices of any origin, a reputation built over centuries of trade history and reinforced by today's relatively limited remaining wild stock in Vietnam specifically. Cambodian agarwood carries similar historical prestige, even though most agarwood now associated with the country is plantation grown rather than wild harvested. Indonesian and Malaysian agarwood, by contrast, are produced in much larger volumes, which tends to keep typical prices lower even though exceptional individual pieces from these countries can still reach high prices.

None of this means one country's agarwood is objectively superior to another's. Preferences for a particular origin's scent profile are subjective and vary by buyer, market, and cultural tradition, and the specific characteristics traders associate with each origin are explored in depth in our regional guides. What is more measurable is that established reputation and limited remaining wild stock both function as real price drivers in their own right, on top of whatever a piece's actual grade and resin content would otherwise suggest.

What This Means If You Are Buying

None of these factors are reasons to assume every expensive listing is legitimate, or that every cheap listing is fake. They are reasons to understand that agarwood pricing reflects several compounding variables at once: formation type, rarity, grade, regulatory status, and format. A price that seems unusually low for what is described as a high grade, wild origin piece is worth treating as a signal to ask more questions, not as a bargain. Our buying guide breaks down realistic price expectations by grade and origin in more detail.