Quart erly M arket Pric e R ep o rt

S ept ember 20 15
CONTENTS
Executive Summary 01
Agarwood and Oud Oil Use 02
Quality Grades 03
Common Industry Adulteration Techniques 04
Oud Oil Scent Characteristics by Country of Origin 06
Retail Prices of Oud Oil 07
Retail Prices of Agarwood Chips 09
Retail Prices of Agarwood Powder 11
Executive Summary
Sustainable Asset Management (SAM) records oud oil retail prices on a quarterly
basis. Much of the independent data available on the subject matter is dated,
limited in scope and/or inaccurately sourced. As a result, SAM has attempted
to provide a more thorough and complete picture of prices, both regional and
country specific, by collating current market retail prices from as many sources as
possible. The research is by no means exhaustive; nevertheless it represents the
most thorough and comprehensive price collation in the industry to date.

Key Research Points:

All prices quoted are collated from 3rd party research sources and usually
reflect reported high street retail prices
Mixed oils (oud oil mixed with oils created from other types of wood/flowers)
are excluded from this analysis as they do not reflect the price of pure oud oil. In
addition, it is unlikely that any of the retailers examined offer CITES certification
for their oils or GC-MS analysis indicating their purity.
Prices are updated every quarter.
Conversion standards used for price calculations are based on the assumption
that 1 tola = 12ml.
Oils of low quality, such as grades B, C, D and E, are excluded for consistency of
comparison.
Oils that are considered rare and one-off purchases are treated as anomalies
and are not incorporated, in an effort to avoid skewing the pricing.
Oils that do not contain a grade in their product description have been selected/
deselected based on an objective view.

Data Limitations
Pricing is limited to retail stores that solely publish prices online in most
instances. The frequency and accuracy of their prices is entirely dependent on
the retailer.
Quality grade is entirely dependent on the accuracy of the retailers descriptions.
Oil purity is assumed to be 100% unless otherwise noted by the retailer.

QUARTERLY MARKET RESEARCH REPORT 1

Agarwood and Oud Oil Use
Type of Use Product Type and Description
Oud oil
Body Fragrance Middle Eastern perfumes
Western styled perfumes are increasingly using it as a base note
Agarwood chips, incense and bakhoor
Clothes Fragrance Scented chips
Middle Eastern & Western style perfumes
Chips, incense and bakhoor
Home Fragrance Scented chips and candles
Sprays
Body lotions and soaps
Toiletries
Shampoo and conditioner
Agarwood chips and oud oil (the highest quality are typically used for special
Honoured Guests
occasions, weddings, dignitaries)
Chips and incense are used in Buddhism, Taoism and Islam
Religious & Traditional
Agarwood beads are used in Buddhism
Ceremonies
Incense is used in Koh Doh, an ancient incense ceremony in Japan
Agarwood is a key ingredient in a variety of Traditional Chinese Medicine (TCM)
treatments
Medicinal Used in various Japanese medicines, such as Rokushingan and Kiougan
Used to cure digestive, psychological, respiratory, and skin disorders, and to
improve the immune system and cancer research
Leaves are used to improve digestion, immunity, skin, aid in weight loss and act as
Tea
a detoxifier

QUARTERLY MARKET RESEARCH REPORT 2

Quality Grades
There is currently no common standard methodology for grading agarwood and oud oil, with various retailers and countries adopting their own systems
with limited science behind them. The quality or grade is known to be largely dependent on the resin saturation within the wood. However, other criteria,
such as wood discolouration, fragrance level and an analysis of its chemical composition are often used in combination with one another.

Grading in the industry is traditionally performed by experienced graders and is dependent on the agarwoods/oud oils perceived colour, smell and
touch. Such grading has made it almost impossible to create a standard benchmark, as the human sensory panel is limited and non-uniform, in addition
to being labour/time intensive and cost-prohibitive to implement on a large scale.

Chemical composition analysis [primarily gas chromatograph and mass spectrometry analysis (GC-MS)] has recently begun being implemented in the
industry after it was found to accurately identify the major compounds that distinguish oil quality. However, despite this grading technique being more
efficient and standardised than the traditional approach, the majority of grading in the market is still dependent on the traditional method of using ones
senses which are varied and subjective.

Grading in the marketplace often uses a lettering system (A to D), combined with descriptive terms (such as super, supreme, deluxe, +/-) and/or a number
classification (1-5) to distinguish quality. There is no commonly accepted set standard, even within individual countries or states, let alone industry wide.
For example, one can find agarwood graded as Super Deluxe, Super Double, Super, A, or oil graded as AAA, AA, A+, A, A1.

QUARTERLY MARKET RESEARCH REPORT 3

Common Industry Adulteration Techniques
Synthetic Oil
Due to the high cost of pure oil, a number of firms and traders have taken to producing and/or selling synthetically produced oil. Synthetic oil is formulated
by creating similar smelling chemical compounds and is a cheap substitute, which is marked up significantly and often marketed as authentic. Synthetics, in
all cases, bear no resemblance to real oud, in terms of smell, characteristics or longevity. In the Middle East, it is almost impossible to pass off synthetics as
naturally occurring; a keen nose will distinguish the difference in aroma as there is no synthetic substitute for high-grade natural agarwood or oils produced
from the tree.
Previously, many of the fragrances in the West being marketed as oud made use of synthetic oils, but this is quickly changing as consumers are becoming
more aware of their differences and more knowledgeable on the natural attributes of authentic oil. Additionally, sustainable and legal supplies have now
begun entering the market, providing perfumers with a credible supply that was unavailable previously. As a result of this shift in consumer awareness, major
perfume brands such as Gucci, Tom Ford, Cavalli and Dior have now begun marketing their premium brands as containing real oud.
A key contributor in raising consumer and industry awareness on natural oils and the use of synthetics has been Mike Edwards, author of Fragrances of the
World and renowned perfume industry expert. He recently presented a seminar at Exsence 2015 in Milan titled The Explosion of Oud in Western Fragrances,
in which he touched upon the topic. He is also presenting a promotional seminar tour funded by a number of key fragrance houses in the Middle East,
educating their consumers on the source and quality of their oud oils within their fragrances.

QUARTERLY MARKET RESEARCH REPORT 4

Common Industry Adulteration Techniques
Mixed Oil
Another common practice is mixing different oils together and passing the resulting mixture off as a pure, high-grade and ultimately more expensive
product. This includes mixing oils from different regions such as rare Indian or Cambodian oil with less popular oil from Indonesia or Vietnam, or mixing
oils of different grades (high with low). Mixing with adulterants is another popular technique, in which badly smelling low quality oil is spiked with glycerin
or other essential oils such as vetiver, fennel or almond oil. Powder is sometimes used in the distillation process as well to make the oil thicker, which many
people wrongly associate with an indication of better quality.
Steamed Agarwood
Poor quality white agarwood is often steamed at high temperatures in order to get a darker brown or black colour and mimic the natural colour that
resembles a high quality piece of agarwood. The resulting product is then passed off as pure, high-grade agarwood. Since the wood used is typically white
wood and void of any significant oil (and thus scent), it is usually scented by being soaked in synthetic or mixed oil.
Soaked Agarwood
Poor quality agarwood which is lacking in oil content does not have a strong aroma. These types of wood are often soaked in synthetic resins and/or mixed
oil to produce what is perceived to be a higher quality product wood or incense. A lot of product on the market sold as black magic wood is typically faked
in this manner.
Sinking Agarwood
Agarwood that sinks to the bottom in water is believed to be one way in which to determine the highest grade of agarwood in particular the existence of
a large amount of resin in the wood. The high resin content and concentration in the wood makes the agarwood denser and heavier than water. This type of
wood is extremely rare and is often faked by stuffing pieces of iron or lead into the wood and/or adhesives such as wax or glue.

QUARTERLY MARKET RESEARCH REPORT 5

Oud Oil Scent Characteristics by Country of Origin
Where the aquilaria trees were grown and associated natural elements such as tree species, soil, water, and age in addition to the distillation technique used all have an
effect on the smell of different oud oils. The regional scents differ in their characters and scent profiles, ranging from strong and earthy to sweet and ethereal. Each region and
aroma has something unique to offer.

Country Typical Characteristic Scent Profile

Can be described as rich, deep and extremely complex. It has an intense, intoxicating, musty, woody note. There is a distinctive underlying smoky,
Thailand
cognac character.
India Strong, earthy smelling aroma. Typically defined as barnyard like, with hard-hitting notes.
Similar to Thai smelling with fruity and sweet notes. Some of the sweet notes typically associated with it are berries, grapes, figs, prunes, caramel,
Cambodia
cinnamon, and vanilla.
Vast scent profile. Typically strong in the mid-range, boasting pleasant jungle and rain forest notes. Northern notes from Borneo start off with a damp,
Indonesia earthy smell, before proceeding to a light, sweeter scent with notes of vanilla, melon, apple, tangerine and gentle spices. Scent of Papua Island-based
agarwood is grassy, herbal and deeply woody.
Vietnam Typical scent profile is sweet, peppery and bitter. Binh Thuan Province is the home of Kinam, a rare type of agarwood with a fresh, sweeter aroma.
Peninsular Malaysia agarwood produces similar smelling scents to Cambodian and Thai sweet smelling with earthy notes. Oil from eastern Malaysia
Malaysia
on Borneo is more herbal, dry, mossy and earthy.
Laos Pronounced woody, pungent and sharp quality with an unexpected sweet dry down.
China Scent profile similar to a mix of Indian and Cambodian. Earthy barnyard tones, although lighter than those found in Indian oil.

Sources:
Agar Aura (2014) Agar Aura, Available at: http://www.agaraura.com/wood.html (Accessed: March 24 2015).
Fragrantica (2014) The Oud Series: Part 6, This is the Smell of Oud Oil, Available at: http://www.fragrantica.com/news/OUD-SERIES-The-Smell-of-Oud-by-Terroir-5253.html (Accessed: March 24 2015).
Olfactory Rescue Service (2011) Oud: Regional Profiling, Available at: https://olfactoryrescueservice.wordpress.com/2011/03/06/oud-regional-profiling/ (Accessed: March 24 2015).

QUARTERLY MARKET RESEARCH REPORT 6

 Retail Prices of Oud Oil
The research data below incorporates a sample of approximately 100 price points from online retailers.
Mar 14 Aug 14 Dec 14 Mar 15 Jun 15 Sep 15
Country No. of Average Price No. of Average Price No. of Average Price No. of Average Price No. of Average Price No. of Average Price
of Origin Samples per Tola (USD) Samples per Tola (USD) Samples per Tola (USD) Samples per Tola (USD) Samples per Tola (USD) Samples per Tola (USD)
Brunei 1 480 1 480 1 480 1 480 1 480 1 480
Cambodia 12 436 20 489 19 567 19 563 19 720 18 347
China 1 380 1 380 1 380 2 700 2 700 3 807
India 23 300 28 448 32 465 25 344 18 335 18 346
Indonesia 6 481 7 426 6 447 8 409 7 343 10 368
Laos 3 253 3 335 3 335 3 315 3 315 5 430
Malaysia 13 492 14 546 17 510 11 269 12 437 5 236
Myanmar/Burma 7 323 8 290 7 328 9 620 7 531 6 402
Thailand 13 361 17 408 18 405 33 403 10 402 14 350
Vietnam 2 142 4 247 4 247 2 152 2 152 7 266
Total/Average 81 365 103 405 108 416 113 425 81 441 87 403

900 Average Retail Price Per Tola (as of September 2015) Avg Mar 14 Price per Tola (USD)
807 Avg Aug 14 Price per Tola (USD)
800
Avg Dec 14 Price per Tola (USD)
700 Avg Mar 15 Price per Tola (USD)
Avg Jun 15 Price per Tola (USD)
600 Avg Mar 14 Price per Tola (USD)

500 480 480 481 492

USD/Tola

436 430
402 403
400 380
368 365
346 361 350
347
328
300
300 266
253
236
200
142

100

0
Brunei Cambodia China India Indonesia Laos Malaysia Myanmar/ Thailand Vietnam Grand Total
Burma

QUARTERLY MARKET RESEARCH REPORT 7

 Price Movement over September 2013 - September 2015

500

450
441
416 425
405 403
388
400
366
365

350

300
USD/Tola

250

200

150

100

50

0
Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15

QUARTERLY MARKET RESEARCH REPORT 8

Retail Prices of Agarwood Chips
The research data below incorporates a sample of approximately 70 price points from online retailers.

December 2014 March 2015 June 2015 September 2015

Country of Origin No. of Average Price No. of Average Price No. of Average Price No. of Average Price
Samples Per KG (USD) Samples Per KG (USD) Samples Per KG (USD) Samples Per KG (USD)
Cambodia 7 3,951 9 4,799 9 4,799 8 4,427
China 2 5,225 1 9,450 1 9,450 5 4,436
India 37 5,035 24 5,360 22 5,755 14 5,194
Indonesia 5 6,770 5 4,438 6 7,864 8 8,484
Laos 2 5,250 1 4,000 1 4,000 4 4,268
Malaysia 5 6,100 8 6,129 10 9,003 12 9,040
Myanmar / Burma 2 9,084 4 7,540 5 6,939 6 5,056
Thailand 7 2,701 7 2,701 7 2,274 9 3,237
Vietnam 17 3,334 9 5,679 9 5,907 9 5,709
Total/Average 84 5,272 68 5,566 70 6,221 75 5,539

Average Retail Price Per KG (as of September 2015)

10,000
9,040 9,084
9,000
8,484

8,000

7,000 6,770
6,100
6,000 5,709
USD/KG

5,539
5,225 5,194 5,250 5,272
5,000
5,035 5,056 Dec 2014
4,427 4,436 4,268
3,951 March 2015
4,000
3,334
3,237 June 2015
3,000 2,701
Sep 2015
2,000

1,000

0
Cambodia China India Indonesia Laos Malaysia Myanmar/ Thailand Vietnam Total/
Burma Average

QUARTERLY MARKET RESEARCH REPORT 9

Price Movement over Dec 2014 - Sep 2015

6,400

6,221
6,200

6,000

5,800
USD/Tola

5,600

5,566 5,539
5,400

5,272
5,200

5,000

4,800

4,600

Dec 14 Mar 15 Jun 15 Sep 15

QUARTERLY MARKET RESEARCH REPORT 10

 Retail Prices of Agarwood Powder
The research data below incorporates a sample of approximately 80 price points from online retailers.

March 2015 June 2015 September 2015

Country of Origin Average Price Average Price Average Price
No. of Samples No. of Samples No. of Samples
Per KG (USD) Per KG (USD) Per KG (USD)
Cambodia 8 775 8 839 4 983
China 4 889 4 888 5 701
India 14 817 12 759 5 438
Indonesia 15 1110 11 1,075 20 1,384
Malaysia 10 334 10 324 3 371
Thailand 15 1265 12 1,332 7 1,333
Vietnam 18 930 16 972 9 1,654
Total/Average 85 874 73 884 53 981

1,800 Average Retail Price Per KG (as of September 2015)

1,654
1,600
1,332 1,333
1,400 1,265
1,384

1,110
1,200 1,075

972 Avg Mar 15 Price per Tola (USD)

930 981
USD/KG

1,000 983
889 888 874 884
839 Avg Jun 15 Price per Tola (USD)
701 817
775 759
800 Avg Sep 15 Price per Tola (USD)

600

438
400 334 371
324

200

0
Cambodia China India Indonesia Malaysia Thailand Vietnam Total/Average

QUARTERLY MARKET RESEARCH REPORT 11

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QUARTERLY MARKET RESEARCH REPORT 12