Indonesia`s Agarwood Potential to Increase

From the tropical rain forests in Sumatera and Kalimantan to Papua and the pastures of Nusa Tenggara, land in Indonesia has one of the most extensive biodiversity on earth.

From its diversity, Indonesia is also known as one of the largest source of gaharu or agarwood, the most expensive wood in the world.

Valued in many cultures for its distinctive fragrance and used extensively in incense and perfumes, Gaharu has been traded for thousands of years throughout Asia.

Inaugurating the first direct agarwood exports to China here recently, Forestry Minister Zulkifli Hassan said gaharu potential in Indonesia was predicted to increase by 600,000 tons per year with its production centers in Papua, Kalimantan, and Sumatra.

Indonesia`s gaharu commodity has been able to penetrate the Chinese market after being exported through third countries such as Taiwan, Singapore, and Hong Kong.

The forestry minister said that the world`s gaharu demand at international market was 4,000 tons per year with China as one of the largest importer with 500 tons a year.

Indonesia has so far been exporting gaharu to Saudi Arabia, Arab Emirates Union, Taiwan, Singapore, Hong Kong, European Union, and the United States.

Zulkifli said that in the past five years Indonesia exported 170 to 573 tons of gaharu with an estimated foreign exchange earnings of US$26,8 million in 2006 and increased by US$86 million in 2010. “We hope that in the years to come our exported gaharu is not only taken from natural forest but also from cultivation,” Zulkifli said, adding that the agarwood was exported in the forms of chips, blocks, powder, and oil. Gaharu cultivation has been developed in Bangka island, Sukabumi, Bogor, Lampung, and East Nusa Tenggara.

Average price of Agarwood (Gaharu)

2006 = USD26.8million for 170 tons. Price per tons = USD157,647.00. Price per kilo = USD157.00
2010 = USD86.0million for 573 tons. Price per tons = USD150,087.00. Price per kilo = USD150.00

Following a success made by Indonesian gaharu exporters to penetrate international markets in China, Hong Kong, Saudi Arabia, European Union, and the United States, farmers in Langkat district, North Sumatra, have turned to agarwood planting to meet international market demand. “We are developing a gaharu tree plantation to meet international market demand,” Langkat district gaharu farmers group spokesman Mahmuddin Sani has said on Tuesday.

Therefore he called on gaharu farmers in Langkat to utilize the increasingly promising agarwood overseas market opportunity by stepping up the quality of the commodity. He said the farmers were also encouraged to actively cultivate gaharu plants in their agricultural areas because to meet the potential international market demand, Indonesia still relies on the commodity in the natural forest.

Meanwhile, Langkat Forestry and Plantation Office`s Land Rehabilitation chief Jonner Pane said seven species of gaharu plant namely Aquilaria Malacensis, Aqurolaria Filaria, Aqularia Microcarga, Actoxylon Simpetthaluum, Aquilaria Aqalocha, Aquilaria Hirta, and Aquilaria Becariana were found at Bahorok, Sei Bingei, Salapian, and Wampu sub-distircts in Langkat.

The most highly priced agarwood are from the families of Aquilaria Crassna, Aquilaria Malacensis, Aquilaria Beccariana, and Aquilaria Fillaria because of their high quality. Meanwhile, an international gaharu seminar is scheduled to be held in Bangka Tengah district, Bangka-Belitung (Babel) province in July this year. Bangka Tengah forestry and plantation office spokesman Mahmuddin said the representatives from 26 countries, signing the Convention on International Trade in Endangered Species (CITES) of Wild Fauna and Flora, would participate in the event.

“In that upcoming seminar we will propose a revision on gaharu export restriction, agreed in the previous CITES meeting, to provide opportunities for gaharu farmers in Bangka Tengah to export their products,” Mahmuddin said in Bangka Tengah district town of Koba recently. Because of excessive hunting for their woods and resin gaharu becomes very rare and is now on CITES appendix II, meaning that this wood in only allowed to be traded in a very small quota. As one of the largest exporter of agarwood, Indonesia restricted its exporting quota into 300 tons per year but only 10 to 20 percent were met.

Mahmuddin explained that in the seminar the participants would be encouraged to revise gaharu export restriction following the high interest of local agar-wood farmers in raising the world`s most expensive wood. “We are going to propose the upcoming international forum not to restrict the areas or countries which cultivate gaharu or agar wood,” Mahmuddin said, adding that a lot of farmers in Bangka Tengah district had a profound interest in cultivating gaharu.

Increasing use of herbal medicine from organic materials has made gaharu increasingly sought as raw material for drugs for various disorders such as stress, asthma, liver, kidney failure, gastroenteritis, colitis, rheumatism, and tumors. Now gaharu is also used in making cosmetics and thus it can be sold at Rp2-5 million per kilogram for average quality and for super quality it can be Rp18 million per kilogram.

But Indonesia Gaharu Association chairman Mashur has said the high quality of agarwood from Aquilaria Filaria in the forest of East Kalimantan could be priced at Rp150 million per kilogram. It is on that basis that the development of gaharu can strongly support the government`s forest conservation program.

Mahmuddin explained that since the past few years the farmers in Bangka Tengah district have been developing gaharu cultivation and up to 2011 there were a total of 235,000 agarwood trees in the district. “Therefore we hope the international gaharu seminar in Bangka Tengah will be of great significance for the local farmers,” Mahmuddin said.

Source: Antara News