AGAR, the world's most precious aromatic substance, is far more valuable by weight than gold. Collecting and inhaling are the latest pastimes of wealthy connoisseurs. Tan Weiyun takes a deep breath.

The incense of kings and royalty has become the incense of choice for newly wealthy Chinese and a piece of agarwood from which it comes is very hot in the auction market.

A piece of resinous rainforest heartwood infected by fungus is one of the most highly sought-after items on the luxury market today. Ritual burning and appreciation requires a connoisseur's sense of scent and sensibility. But new riches snap it up and display it like old Bordeaux. Some is carved into jewelry or religious statues.

It is known as agarwood, agar, aloeswood, eaglewood, jinkoh and gaharu and is prized around the world. The fragrance is complex and pleasing and there are few or no natural analogues.

In China it is called chen xiang (literally wood with mellow fragrance). It is used in traditional Chinese medicine, aryuvedic medicine and aroma therapy, as well as various religious rituals.

Earlier this month a piece of agarwood sold for 360,000 yuan (US$55,656) at the 1st Shanghai Fragrance and Wood Furniture Exhibition. But 20 years ago it would have fetched no more than 10 yuan. A fragrant chen xiang bracelet of 17 beads, each a centimeter in diameter, was priced at 80,000 yuan.

"The fragrance culture once popular in ancient China has returned now. The chen xiang frenzy is coming," says Chen Lei, director of the China Fragrance Culture Center of the Chinese Arts and Crafts Institute in Shanghai.

"Gold is nothing compared with chen xiang wood," says Ren Gang, Shanghai's first collector who opened Yonghe Hall, a villa containing various chen xiang artworks. Chen xiang is weighed and valued by the gram and each gram of high-quality agarwood can be priced at more than 10,000 yuan. The current price as of last Friday was 359 yuan a gram.

Agarwood comes from aquilaria and gyrinops evergreen trees in Southeast Asia and differs according to species and region. It is produced when a tree is infected with a certain fungus and in response produces a dark, volatile, fragrant resin to combat the invasion. The heartwood, usually pale in color, then darkens and becomes denser; the darker the wood, the richer it is in resin, hence the more valuable. Essential oil can be extracted.

"That's also why an agarwood bead bracelet will turn dark after years of wearing, because the inside oil is coming out," Ren says.

Though trees are inoculated commercially to introduce the fungus, the rare natural wood is far more valuable and natural resources are scarce.

Chen xiang can be burned as for relaxing aroma therapy; oil can be extracted for high-end perfumes; it can be carved into statues and other items, as well as jewelry. In traditional Chinese medicine, it can be processed and used to treat heart disease, nourish the stomach and warm the kidneys. It is a stimulant, a tonic and a diuretic. It has been used since ancient times to treat fatigue, stress and depression.

In China a few trees only grow in Hui'an in coastal Fujian Province. Elsewhere they grow in Cambodia, Indonesia, Laos, Malaysia, Thailand, Vietnam and India.

In response to soaring prices, trees are being cultivated and artificially inoculated with fungus in Hainan Province, which has a tropical climate.

"Businessmen can smell the cash from this wood, but I don't think artificially grown chen xiang has much value," the collector Ren says.

The natural agarwood from Kalimantan, Indonesia, smells rich and deep, while agarwood from Irian Jaya has a slightly sweet and wispy aroma.

"That's the beauty of chen xiang. You need breathe it with a pure heart and soul," says curator Shi Jue, who just launched a chen xiang wood carving sculpture exhibition in Shanghai. She also initiated the Chen Xiang Intangible Cultural Heritage Protection Fund.

"The natural environment, climate, temperature and humidity determines everything," Shi says. "These factors determine whether the fragrant resin or oil will be formed in decades or hundreds of years."

The more oil the wood contains, the more valuable it is. "It's the inside oil we're crazy for," she says.

A piece of agarwood full of resin has lost its woody nature and become virtually an oil brick. When it burns, the fragrance is pleasing and mellow, without the pungent smell of charcoal from wood.

Appreciating the fragrance is luxurious experience and some people find it quite spiritual.

"You should first clear your mind and put yourself in a peaceful and relaxed state," collector Ren says.

The room where the oil or incense is burned must be completely still; no one is allowed to move, causing the air to move and the fragrance to dissipate more quickly. Silence is required.

The ritual involves an incense burner or censer, old agarwood ashes, charcoal powder and some thin slices of chen xiang. Ren first burns the charcoal powder in an intricately carved censer, then sprays a thin layer of old agarwood ashes on the burning powder.

The temperature in the censer is controlled to 180-200 degrees Celsius. A piece of mica, a sort of silicate tray, is placed on the ashes and then a thin piece of agarwood is placed on the mica. Then the lid is placed on the censer and within seconds the fragrance arises through its openings and fills the room.

Not all agarwood is good for burning and chen xiang from different regions is appreciated in different ways.

Agarwood from Vietnam and Laos gives off a pleasing fragrance when heated or warmed but is totally without at room temperature. However, Malaysian chen xiang is just the opposite - it is fragrant at room temperature - which makes it perfect for carving.

The best and often the most expensive chen xiang is from India. Whether burned, heated or at room temperature, it always gives off a pleasant odor, so it has many uses.

A quality piece of incense can burn for hours and remain intact; it doesn't crumble into ashes.

Natural agarwood has varying textures and densities and carving requires considerable skill so the wood is not wasted. It is valued in a number of religions and is made into various Buddhas, deities and talismans.