First grade agarwood (Oud) is one of the most expensive natural raw materials in the world. Distilled from the fast-disappearing Aquilaria tree, Oud commands enormous prices – seemingly ever-increasing, based on the quality and purity of the oil.
However, as in the case of the myriad men and women who have gone on to achieve greatness, the first chapter in the story of Oud is one of humble beginnings.
Prior to this essential oil securing great cultural and religious significance in ancient civilizations, agarwood – which was plentiful at the time – was used merely for heating purposes during long, cold winter nights. In hindsight, using agarwood to light fires was the ancient world’s equivalent of transforming Goût de Diamants’ Champagne into ice cubes.
Agarwood’s fortunes, however, would soon rise from those inauspicious ashes. As early as the 8th Century, the Sahih Muslim and the medicinal text the Sushruta Samhita mentioned and commended the healing qualities of agarwood and its use in medicinal products.
Then, in 1596, Islamic preachers from the Arabian Peninsula visited the Indian region of Assam, and were immediately mesmerised by the complex and enchanting scent of the burning agarwood.
They were given a quantity of the wood to take home, which they gave as presents to various delighted dignitaries and sheikhs.
So pleased were those who received the gifts, that they asked one of the preachers to return to India to bring back more agarwood, offering to finance the trip themselves.
On his return, however, he encountered a problem. The villagers forbade him from taking any more wood home unless he agreed to marry a local woman.
He acquiesced, and from that point on, he was given license to export agarwood back to the Arabian Peninsula where it was sold at lofty prices.
After his death, the preacher’s son discovered a way to extract the oil from the wood, and soon afterwards he began transforming the resulting product into fragrances.
Fast forward a few hundred years, and while the production processes may have changed, the desirability of Oud and the reverence in which it is held certainly have not.
Unfortunately, the unquenchable thirst for Oud has caused a huge depletion of the natural resource.
Since 2000, the trees from which Oud is obtained have been placed on the CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) list of endangered species, and their harvesting in the wild has been made illegal.
Demand is insatiable, and growing, and has contributed to the trees in the wild being harvested to the point of near extinction due to their value in Chinese and Middle Eastern cultures, as well as their wide variety of other uses in the pharmaceutical, cosmetics and fragrance industries, to name but three.
Stocks are limited, while demand is increasing, and the fact that only seven in every 100 trees produce Oud, and that even those seven can only produce a tiny amount of the magical oil, has led to an unprecedented vulnerability of supply.
It has also created a unique investment and sustainable business opportunity.