Tree containing eastern island resin (5)
I believe the answer is:
elemi
'resin' is the definition.
(I know that elemi is a type of gum resin)
'tree containing eastern island' is the wordplay.
'tree' becomes 'elm' (elm is a kind of tree).
'containing' indicates putting letters inside.
'eastern' becomes 'e'.
'island' becomes 'i' (geographical abbreviation).
'elm' enclosing 'e' is 'elem'.
'elem'+'i'='ELEMI'
(Other definitions for elemi that I've seen before include "Fragrant tree resin used as incense - I'm Lee (anag)" , "Fragrant resin used as incense - Emile (anag)" , "Fragrant substance" , "It's fragrance" , "Resinous stuff" .)