The global agarwood essential oil market is projected to reach approximately US$ 140.9 million by 2024 and is expected to grow at a compound annual growth rate (CAGR) of 4.7% until 2034. Europe, East Asia, and the Middle East are anticipated to emerge as key regional markets for suppliers of agarwood essential oil in the foreseeable future.

Agarwood essential oil is highly aromatic and is extensively used in different industry verticals for its splendid fragrance. Growing focus on alternative medicine, rising popularity of aromatherapy, and increasing awareness regarding the health benefits associated with the use of agarwood essential oil are projected to be key prospects that are projected to drive market growth over the coming years.

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Growing use of agarwood essential oil in the formulation of different personal care products and cosmetics provides a unique fragrance and is predicted to present agarwood essential oil companies with a plethora of new opportunities across the study period and beyond. This study by Fact.MR, a market research and competitive intelligence provider, suggests that the rising popularity of aromatherapy around the world is slated to catalyze the demand for agarwood essential oil in the long run.

Key Takeaways from Market Study

The agarwood essential oil market is poised for significant growth, with an estimated value of US$ 140.9 million in 2024, projected to expand at a steady compound annual growth rate (CAGR) of 4.7% through 2034. By the end of this period, the market is anticipated to reach US$ 224.6 million. Key drivers of this growth include increasing demand for natural fragrances, rising popularity of aromatherapy, and a growing preference for natural ingredients in personal care products and cosmetics. Additionally, the acceptance of agarwood essential oil in alternative medicine practices and its association with health benefits further bolster market prospects.

However, the market faces challenges, notably from the proliferation of counterfeit products, which could undermine consumer trust and market integrity. Despite these challenges, organic agarwood essential oil is expected to hold a significant share, accounting for 35.2% of the global market by 2024. Regionally, East Asia is set to experience robust growth with a forecasted 5% CAGR over the next decade, reflecting increasing consumption and production capabilities. In the United States, sales are predicted to reach US$ 34.1 million by 2034, highlighting growing consumer awareness and demand for premium natural products in the region.

List of Key Companies Profiled in The Report

  • Biofinest USA
  • SVA Naturals
  • Dauper S.A.
  • Aromaaz International
  • Nusaroma
  • BIOLANDES SAS
  • Hoang Giang Agarwood Ltd.
  • Katyani Exports
  • Essential Oil Wizardry
  • Others

Winning Strategy

Agarwood essential oil suppliers should focus on setting stringent quality standards to eliminate the threat of counterfeit products. Agarwood essential oil companies should also focus on supplying organic agarwood essential oil to meet the surging demand for clean label and organic ingredients around the world.

Global Agarwood Essential Oil Market Dynamics Amid Organic Production Challenges

The organic version of agarwood essential oil remains economically impractical for many companies due to its exceptionally high cost. Consequently, conventional agarwood essential oil takes precedence in global sales among businesses incorporating it into their products.

Surging Demand for Oud Scent Boosts Conventional Agarwood Essential Oil Sales

The increasing popularity of the Oud scent in perfumes, incense, and personal care items is anticipated to drive sustained growth in the sales of conventional agarwood essential oil. This surge in demand aligns with the global preference for the distinctive Oud fragrance.

Organic Agarwood Essential Oil on the Rise Amid Consumer Shift Toward Organic Awareness

Concurrently, there is a projected uptick in demand for organic agarwood essential oil as consumers become more conscious of organic products. This shift reflects an increasing awareness of the benefits associated with organic alternatives in the market.

Competitive Landscape

Distributors of Agarwood essential oil are poised to capitalize on the increasing incorporation of functional ingredients in the creation of diverse personal care and cosmetic items.

In September 2023, Kayali Perfumes, a fragrance brand established in 2018 by Mona Kattan, co-founder of HUDA BEAUTY, revealed the introduction of a fresh collection of Oud perfumes. Comprising four distinct fragrances with varying intensities, this line offers consumers a diverse and luxurious olfactory experience. This strategic move by Kayali Perfumes underscores the brand's commitment to meeting the evolving preferences of consumers in the fragrance market.