Friday, May 25, 2007

National Strategy Needed for Aquilaria Development

As a consequence of a prolonged exploitation, the output of natural agar wood or aloes wood worldwide in general and in Vietnam in particular has become increasingly exhausted. Facing this situation, Vietnam has taken measures to stop illegal exploitation and put agarwood onto the list of forbidden national goods. Concurrently, the country has applied artificial methods to develop this kind of tree, initially producing satisfactory results.

Agarwood - high economic value
In the past ten years, agarwood has been available only in Malaysia, Indonesia, Thailand and Myanmar, but the quantity remains at a low level due to excessive exploitation. At present, agarwood supplies come from Laos, Cambodia and Vietnam, and Vietnamese agarwood is of the best quality.

According to Vietnam Oil Essence, Aroma and Cosmetics Association, agarwood oil essence now costs VND750 million or roughly US$50,000 per litre but the product from Vietnam could reach a price of VND1 billion or US$63,700 per litre because of its superior quality. The association said, before 1991, the aloeswood export in raw form and fine-art wooden products, with the major market of Taiwan, hit US$10-15 million per annum.

Notwithstanding this, due to protracted extravagant exploitation, Vietnam almost ran out of natural agarwood in 2002. The Government has, therefore, banned its exploitation and trade, and considers it a nationally prohibited commodity.

In 1997, Vietnam started to inject chemicals or "transplant" hard objects into aquilarias to create agarwood and achieved success in Quang Nam and some other provinces. A preliminary calculation showed that Vietnam has about 6,000 hectares of aquilarias nationwide. According to investors, a total spending for growing 6,000 aquilarias on one hectare for 10 years stands at around VND36.5 million (US$2,325) and agarwood sales should bring in at least VND3 billion (US$0.19 million). In case the tree does not produce agarwood, it is more profitable to sell its wood to make incense than to grow cinnamons or trees for paper pulp for the same duration.
There must be a national strategy for aquilaria development
In addition to the Chinese, Japanese and South Koreans love agarwood. Hoang Phan Long, the director of Tien Phuoc Aloeswood Company in Da Nang, said that once Vietnam could manage to make agarwood incense sticks or a piece of carved agarwood, the products would certainly be meaningful souvenirs for every visitor to Vietnam. Today, even though the country has been able to produce artificial agarwood, its ban on agarwood exploitation and export remains, and agarwood is still considered a national good.

Thus, a number of agarwood trading companies are forced to sell their products abroad, declaring them as a material for making incense. In so doing, the companies will face very big risks while the State bears a tax loss. Also because of this risk, the buying price of agarwood in Vietnam is four times lower than the selling price on international websites.

At a recent conference on the aquilaria, General Secretary of Vietnam Oil Essence, Aroma and Cosmetics Association said that Vietnam should map out a national strategy on aquilaria.

Currently, as much as 95 per cent of agarwood on the market is artificial and the Government ought to create a legal corridor for the development of aquilaria. Hopefully, in the near future, agarwood will act as a key export commodity of Vietnam.
Hoa Binh

1 comment:

Kimmy said...

Thanks for writing this.