The Formation of Aloeswood
Aloeswood occurs as a result of a complex, natural defense mechanism in a tree. After it has been infected by a fungus, which attacks through wounds on its trunk, the tree begins to produce a resin within its limbs and trunk. Aloeswood is formed by the maturing of this resin, a process that can take anywhere from several decades to hundreds of years.
In the highest quality aloeswood, known as black agar or Kyara, the resin becomes so dense that it causes the wood to sink in water.

The fragrance of aloeswood can vary greatly depending on the country of origin, the density of resin and depending also on the part of the tree from which it is harvested.

Aloeswood Oil
Aloeswood comes in solid or liquid form. Solids are only solid at room temperature, and if warmed slightly, it turns to mobile liquid. It is an anti-asthmatic and can be applied directly to the skin as it is non-irritating. The oil is very tenacious and only the tiniest of drops is needed to fill the air with its soul evoking aroma. It is a complex aroma with many nuances?Krich, deep and ethereal. The aroma takes about 12 hours to unfold and it will last on the skin for more than a day, and if placed on any material, the scent can last for months. It can be used as a perfume, an aroma therapy and an essential oil.

Aloeswood Woodchips
Aloeswood woodchips are meant to be used as incense. A sliver should be placed on charcoal and it will smoulder for sometimes hours?Kdepending on the woodchip size. A sliver is all that is needed to enjoy the wonderfully hypnotic aroma for about an hour.
The five qualities (tastes) used to classify Aloeswood Aromas
Sweet -- Resembles the smell of honey or concentrated sugar
Sour -- Resembles the smell of plums or other acidic foods.
Hot -- Resembles the smell of red peppers when put in a fire.
Salty -- Resembles the smell of a towel after wiping perspiration from the brow or the lingering smell of ocean water when seaweed is dried on a fire.
Bitter -- Resembles the smell of bitter herbal medicine when it is mixed or boiled

Different Grades of Aloeswood
There are many different grades of aloeswood, which are determined based on the density of resin and the type and intensity of the aroma it produces. The lower grades are often used in essential oil, while the higher grades are mainly used for incense. Generally, like fine wine, the ones with the longest maturing time have the greatest aroma. The highest grade of aloeswood is called Kyara, which means "precious" in ancient Japanese, and it is more expensive per ounce than gold.

Agarwood trees must be infected by a fungi, prior to producing an oleoresin which saturates the wood. This oleoresin saturated wood is where the mystical fragrance of Oud originates. There are many grades of agarwood, and the highest quality wood is extremely expensive. In fact, the first-grade wood is one of the most expensive natural products in the world, for top quality wood. The essential oil from wild agarwood trees is likewise one of the most expensive oils in the world. The finest aloeswood oil would, of course, be much more expensive.

Value
The value of first-grade Agarwood is extremely high. A whole range of qualities and products is on the market varying with geographical location and cultural deposition. Prices range from a few dollars per kilo for the lowest quality to over thirty thousand US dollars for top quality oil and resinous wood. Aquilaria crassna is listed as an endangered species in Viet Nam, and A. malaccensis is listed as endangered by the World Conservation Union, IUCN.