Explanation:

• Statements 1 and 3 are correct: Agarwood, most commonly referred to as oud or oudh is a fragrant, dark and resinous wood used in incense, perfume, and small hand carvings. It forms in the heartwood of Aquilaria trees after they become infected with a type of Phaeoacremonium mold, P. parasitica. Agarwood forms when Aquilaria trees are infected by fungi, which triggers the production of a resin. Agarwood (Aquilaria malaccensis) is listed in Appendix II of CITES.

• Statement 2 is incorrect: Agarwood is primarily used in perfumes, incense, and traditional medicine.

Hence option 2nd is correct.