Strong Demand for Agarwood
Recent headline from themalaysianreserve.com stated that The Malaysian Timber Industry Board (MTIB) plans to the cultivation of agarwood in the country to meet the rising global demand, particularly from China and the Middle East.
Its deputy DG Mohd Kheiruddin Mohd Rani said the board will identify more lands for the cultivation of the multipurpose plant species, which is dubbed as the “gold of the rainforest”.
“We cannot solely depend on the existing forests to supply agarwood. We need more big estates to plant it.
“Prior to this, the commodity was cultivated by smallholders,” he told reporters at the International Conference on Agarwood, Incense and Fragrances 2019 in Kuala Lumpur yesterday.
Also present was Primary Industries Minister Teresa Kok.
Mohd Kheiruddin said agarwood — better known as “gaharu” in Malay — is listed under Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which limits trading according to the size of the plantation area.
Currently, about 2.2 million agarwood trees have been planted on a total 2,234ha of land, he added.
Mohd Kheiruddin also said the total exports of agarwood’s downstream products have doubled against the value of the commodity’s upstream exports.
“In terms of production, we were the fifth-largest exporter of agarwood products in the world last year, with the export value for the incense products and fragrances reaching RM22 million and RM112 million respectively.
“These are the value-added products,” he said, adding that the export of agarwood chips stood at RM9.93 million in 2018.
Mohd Kheiruddin also said the export for agarwood upstream products could increase by 20% to RM12 million next year, if initiatives to increase the supply are being conducted on a full scale based on the Karas and Gaharu Development Action Plan 2011-2021.
Meanwhile, Kok said the agarwood industry is still seeing a lack of interest from commodity planters to participate in the cultivation process and to recognise it as an alternative.
“This industry will be worth more than what it is today if more people are involved in the cultivation side as we have the market.
“The industry is facing an undersupply of agarwood planters because the cost to start the cultivation is quite high,” she said.
To date, there are about 194 companies and individuals who have registered with MTIB to plant agarwood trees and process the downstream products.
Since agarwood has been listed under the CITES by producer and consumer countries as a controlled commodity, the production of agarwood products is being capped to ensure its sustainability.
Last year, a total 38.6 tonnes of agarwood chips were exported to countries such as Taiwan, Singapore and Vietnam.
Comparatively, Malaysia had exported a total RM22.29 billion of timber products in 2018 and the number is expected to reach RM23 billion this year.