Agarwood Chips Market to Witness Robust Expansion Driven by Luxury Fragrances and Wellness Demand

Agarwood Chips Market Demand

Rising Demand in Perfumery and Traditional Medicine Fuels Global Market Growth

BRENTFORD, ENGLAND, UNITED KINGDOM, February 9, 2026 /EINPresswire.com/ -- The global agarwood chips market is poised for steady expansion over the coming years, supported by rising demand for premium fragrances, natural incense, and wellness products. According to industry estimates, the agarwood chips market is projected to increase from US$41.05 billion in 2024 to US$67.45 billion by 2031, registering a compound annual growth rate (CAGR) of 7.4% during the forecast period from 2024 to 2031. The market’s upward trajectory reflects growing consumer interest in natural aromatic materials, cultural traditions, and luxury lifestyle products worldwide.

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Market Overview

Agarwood chips, also known as oud chips, are derived from resin-infused heartwood of Aquilaria trees. The resin forms naturally when the tree is infected by certain molds, producing a distinctive fragrance that has been prized for centuries in perfumery, incense, and traditional medicine.
These chips are considered a premium commodity due to their rarity, complex aroma profile, and cultural significance across Asia, the Middle East, and parts of Europe. As global consumers increasingly seek natural and authentic experiences, agarwood chips have gained traction across both traditional and modern applications.
The industry has demonstrated strong historical growth, driven by expanding use in luxury perfumes, religious ceremonies, aromatherapy, and high-end wellness products. The market continues to benefit from rising disposable incomes, particularly in emerging economies where demand for luxury and natural products is accelerating.

Key Growth Drivers

Rising Demand for Natural Fragrances and Luxury Products
One of the primary drivers of the agarwood chips market is the increasing demand for rare and natural fragrance ingredients. Agarwood is widely used in premium perfumes and incense due to its deep, complex aroma and high oil content. As consumers shift away from synthetic fragrances toward natural alternatives, the demand for agarwood chips is growing significantly.
Luxury perfumery brands and niche fragrance houses are particularly driving demand for high-grade agarwood chips, which are used to produce oud oil and high-end aromatic blends. The luxury positioning of agarwood products, especially in the Middle East and Southeast Asia, continues to fuel market expansion.
Expanding Aromatherapy and Wellness Industry
The global wellness trend has further accelerated the adoption of agarwood chips. Consumers are increasingly turning to aromatherapy and holistic practices for stress relief and relaxation, and agarwood’s calming scent is widely associated with therapeutic benefits.
The use of agarwood in candles, essential oils, meditation products, and spa rituals has expanded its appeal beyond traditional uses. As wellness becomes a key lifestyle focus, agarwood chips are expected to gain broader acceptance across new consumer segments.
Cultural and Religious Significance
Agarwood has long been used in spiritual rituals, religious ceremonies, and traditional medicine in countries such as India, China, Japan, and across the Middle East. Its association with meditation and purification has helped sustain consistent demand. Incense sticks made from agarwood chips remain the largest end-use segment, contributing significantly to global market revenues.
In many cultures, agarwood is regarded as a symbol of luxury and spiritual well-being. The continued popularity of traditional incense and ceremonial uses ensures a stable consumer base for agarwood chip producers worldwide.
E-commerce and Global Distribution Expansion
Digital platforms and e-commerce channels are helping producers reach global markets more effectively. Online marketplaces enable consumers to explore various grades and types of agarwood products, while producers can sell directly to customers without intermediaries. This increased accessibility is expanding the market beyond traditional retail networks.

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Market Segmentation

By Nature
• Organic
• Conventional
By End Use
• Incense Stick
• Fragrances
• Retail /Household
• Specialty Clinics
By Distribution Channel
• Business to Business (B2B)
• Business to Consumers (B2C)
By Region
• North America
• Latin America
• Europe
• South Asia & Oceania
• East Asia
• The Middle East & Africa

Competitive Landscape and Innovation

Market players are increasingly investing in research and development to explore new applications for agarwood, including pharmaceuticals, cosmetics, and advanced fragrance formulations. Partnerships with sustainable plantations and investments in traceable supply chains are becoming common strategies among leading companies.

Companies Covered in Agarwood Chips Market

Grandawood Agarwood Australia
Binh Nghia Agarwood Co., Ltd
Hoang Giang Agarwood Ltd.
Aalam Ul Oud
KAB Industries
Duy Hai AGARWOOD.
Thien Phu agarwood Co.,Ltd
Asia Plantation Capital Pte Ltd.
Ori Oud Asia
ASSAM AROMAS
Sadaharitha plantations limited
Green Agro
Thai Borai Agarwood Co.,Ltd.
KANHA AROMA
Homegrown Concept Sdn Bhd (HGC)
THE MJI GROUP,
Sai Export India
Kamil Swarga Woods Ltd
THE WESTWOOD GROUP
Garahu International

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Future Outlook

The global agarwood chips market is expected to maintain steady growth through 2031, supported by expanding applications in luxury fragrances, wellness products, and traditional uses. Rising consumer awareness of natural ingredients, combined with growing interest in aromatherapy and spiritual practices, will continue to drive demand.