Melaka advances agarwood oil grading standards to strengthen the local industry

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Melaka agarwood oil grading standards

Highlights

The government is introducing a National Agarwood Grading System through MTIB to set standards for local agarwood oil and strengthen the Malaysian Oud brand in global markets.
As of September 2026, 456 agarwood growers with 2.3 million Aquilaria trees had registered with MTIB, including nearly 100 new growers in less than a year.
MTIB approved inoculation incentives of RM100 per tree (RM1.76 million in total) for 161 agarwood growers, and also offers oil distillation incentives to add value to products.

This article was translated from the original. Read the original version by our correspondent here.

Project implementation and grading objectives

As reported by The Edge Malaysia, Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said the project marks an initial step towards developing a National Agarwood Grading System, which is being pursued by the Malaysian Timber Industry Board, MTIB, together with research institutions and industry experts.

She said developing the standards is important to ensure that local agarwood oil extracts have clear grading standards, thereby strengthening the identity and brand of Malaysian Oud globally. The standards are needed to boost buyers’ confidence and help Malaysian agarwood compete in international markets, she said.

Noraini said efforts to strengthen the agarwood industry also include supporting growers and entrepreneurs through various initiatives provided by MTIB. She said the industry’s potential extends beyond producing agarwood and essential oils for cosmetics, aromatherapy and perfumes, as karas tree leaves can also be made into products such as tea, coffee and biscuits.

Incentive support and industry growth

As of September 2026, 456 agarwood growers had registered with MTIB, cultivating around 2.3 million Aquilaria trees, or karas trees, while nearly 100 new growers had joined the industry in less than a year. Through MTIB, the government provides an inoculation incentive of RM100 per tree, with RM1.76 million approved for 161 growers to date.

MTIB also provides oil distillation incentives to help entrepreneurs add value to agarwood-based products. Noraini said Malaysia is home to five of the 22 Aquilaria species found worldwide, including Aquilaria malaccensis, which is named after Melaka.

Earlier, she said the two-day Agrikomoditi Entrepreneur Festival 2026, which ended on Tuesday, 10 Nov, brought together more than 10 entrepreneurs showcasing and selling agrocommodity products, particularly those made from timber, cocoa, kenaf and palm oil.

In our previous coverage of coordinated enforcement on the entry of foreign products and entities into the local market, we reported on the government’s move to establish an inter-ministerial working committee to ensure fairer competition and protect micro, small and medium-sized enterprises (MSMEs). The article also covered the focus on drafting the e-Commerce Bill and standardising the “Jom Beli Produk Malaysia” logo promotion, as well as funding for programmes to help local products enter digital platforms and overseas markets.

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