Why is oud oil so expensive?
The kings loved it. The thieves loved it. The common man walking on the street loved it. And, today’s fragrance industry loves it too. Oud (or oudh) is also known as agarwood, aloeswood or gharuwood.
Agarwood trees get infected with a type of mould at some point in its life time and in response to that the tree produces a dark aromatic resin mostly concentrated in its heartwood. There are many varieties of agarwood; almost around 30 types. These trees can be found mostly in the area stretching between Sri Lanka, India, and right up to Indonesia encompassing Vietnam, Laos, Thailand, Malaysia and Cambodia.
Today the wild reserves are depleting and at a point where we can confidently say that we are at the end of the availability of naturally infected wild agarwood. What we see in the market is mostly cultivated agarwood and typically not so old.
The beauty of agarwood is that when the oil is aged, it forms an intensely fragrant aroma, which is extremely complex and exceptionally beautiful in character. Every agarwood species yields a different kind of aroma. There are as many aromas as there are trees. Each bottle of oud oil will smell differently depending upon the age, distillation technique and the region from where it is obtained.
During distillation the artisan is typically able to obtain about 3~5% in weight of oil per kilo of agarwood being distilled. The cost of agarwood chips may range anywhere between US$ 2,000 and high as US$ 25,000 a kilo. There are some rare varieties which can cost higher than this whereas there are some which are never distilled for oil; in fact those are burnt as premium incense or oud bakhoor.
Now, let’s do a quick math:
About 10 kilos of agarwood chips costing say US$ 5,000 per kilo are soaked in water a week in advance for distillation process to occur. So, we are sitting on raw material worth US$ 50,000 already. For every kilo of yield we are left with between 3~5 ml of pure oud oil (3–5% net yield). After distilling 10 kgs of agarwood for roughly 30 hours we get anywhere between 30~50 ml of purest of the pure agarwood oil.
If we were to consider the higher yield, i.e. 50 ml for every US $50,000 worth of raw materials (distillation expenses, labor and spillages, extra!), we get a per ml cost of US$ 1000+ per ml. If the oud artisan were to add in his profits, expenses incurred on distillation, labor costs, spillages, accidents, etc., he will, eventually, end up adding almost 50~100% over and above his outcome price and this new price becomes their retail price.
So, with all the math we come to a conclusion that US $2000 is the final price you pay per one ml of ‘Dahn al Oud’, as Arabs would like to call (literally, ‘the fat of the wood’) to keep your oud artisans in business and you smelling fabulous.
