Agarwood Essential Oil Market to Witness US$ 278.1 Mn by 2031 - Persistence Market Research

The global agarwood essential oil market is gaining steady momentum and is forecasted to increase from US$204.3 Mn in 2024 to US$278.1 Mn by 2031, registering a compound annual growth rate (CAGR) of 4.5% during the forecast period. Agarwood oil, a rare and valuable product derived from Aquilaria trees, is revered for its aromatic, therapeutic, and spiritual significance. Widely used in perfumery, cosmetics, and aromatherapy, the market is experiencing increased interest due to a rising demand for natural and organic products. The surge in wellness awareness and the integration of essential oils into daily routines, including skin care, home fragrance, and spiritual practices, are key contributors to the market's upward trajectory.

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Among the various market segments, the organic agarwood essential oil is expected to dominate with a projected market share of 97.57% in 2024, reflecting the shift towards clean and natural beauty products. Regionally, the Middle East & Africa will lead the global market, commanding 30.32% market share in 2024, owing to cultural preferences, traditional usage, and established trade channels. Latin America, meanwhile, is poised for the fastest growth with a 6.94% CAGR, driven by rising aromatherapy applications and cosmetic demand.

Key Highlights from the Report

➤ Organic segment is projected to capture a market share of 97.57% in 2024.
➤ The personal care and cosmetic industry will hold 98.47% of the market share by end of 2023.
➤ Latin America is expected to grow at a CAGR of 6.94% from 2024 to 2031.
➤ Middle East and Africa will command a 30.32% share of the market in 2024.
➤ Increasing adoption of agarwood oil in spas, wellness centers, and home fragrance products is enhancing market expansion.
➤ The global market is projected to grow from US$204.3 Mn in 2024 to US$278.1 Mn in 2031.

Market Segmentation

The agarwood essential oil market can be segmented based on nature and end use. By nature, the market is classified into organic and conventional products, with organic holding the dominant position due to growing demand for chemical-free, sustainable goods. On the basis of end use, the personal care & cosmetics segment is the clear leader, accounting for 98.47% of revenue share, driven by its broad applications in skin care, perfumes, and wellness products. Other key end-user segments include the pharmaceutical and food & beverage industries.

Regional Insights

The Middle East and Africa holds the highest market share, at 30.32% in 2024, attributed to long-standing cultural and religious uses of agarwood oil, especially in countries such as the UAE and Saudi Arabia. Latin America is emerging as a strong growth frontier, anticipated to post the highest CAGR of 6.94% during the forecast period, due to increasing awareness of holistic wellness and demand for natural cosmetics. North America and Europe continue to see moderate growth, primarily supported by wellness trends, premium skincare, and fragrance applications.

Market Growth Drivers

The market is bolstered by rising consumer preference for natural and sustainable products. As health-conscious individuals become wary of synthetic chemicals, essential oils like agarwood are gaining popularity in beauty and personal care formulations. Additionally, the booming aromatherapy sector, where agarwood oil is lauded for its anti-anxiety and calming effects, is expanding the market footprint.

Another significant growth catalyst is agarwood oil's appeal in luxury segments. Its rarity, spiritual significance, and exotic fragrance make it a highly sought-after component in high-end perfumes and wellness products. This premium perception enhances consumer willingness to invest in quality agarwood offerings.

Market Restraints

Despite positive growth trends, the market faces notable challenges. One major concern is the overharvesting of Aquilaria trees, which poses a threat to sustainability. Regulatory restrictions and environmental concerns may hinder supply, driving up costs and impacting availability. Additionally, the high cost of agarwood essential oil, due to its labor-intensive production and limited supply, restricts its adoption across mass markets.

Counterfeit and adulterated products also pose risks to market integrity, eroding consumer trust and hampering overall industry reputation.

Market Opportunities

The growing trend toward eco-conscious consumerism presents lucrative opportunities for market players. Sustainable sourcing, ethical trade practices, and transparent labeling can enhance brand appeal and customer loyalty. Moreover, expansion into untapped emerging markets such as Southeast Asia and Africa can unlock new demand bases for essential oils.

Companies that invest in technological advancements for efficient agarwood oil extraction and eco-friendly practices will likely gain competitive advantages. Education campaigns around the benefits and authenticity of agarwood oil could further stimulate demand.

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✔ Comprehensive analysis of current and future market trends to aid strategic planning
✔ Insightful segmentation analysis to identify high-growth segments and regions
✔ Evaluation of key drivers, restraints, and opportunities influencing the market
✔ Competitive intelligence including major players and recent developments
✔ Data-backed forecasts and market sizing to support business decisions

Company Insights

• BIOLANDES SAS
• Tien Phuoc Co., Ltd
• Hoang Giang Agarwood Ltd.
• Dauper S.A.
• Katyani Exports
• Gritman Essential Oils
• Essential Oil Wizardry
• Biofinest USA
• Nusaroma
• Aromaaz International
• Kush Aroma Exports
• SVA Naturals

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