Resin from tree around eastern island (5)
I believe the answer is:
elemi
'resin' is the definition.
(elemi is a kind of resin)
'tree around eastern island' is the wordplay.
'tree' becomes 'elm' (elm tree is a kind of tree**).
'around' is an insertion indicator.
'eastern' becomes 'e'.
'island' becomes 'i'.
'elm' going around 'e' is 'elem'.
'elem'+'i'='ELEMI'
'from' acts as a link.
(Other definitions for elemi that I've seen before include "Fragrant tree resin used as incense - I'm Lee (anag)" , "Tree resin; ie, elm (anag.)" , "Fragrant substance" , "It's fragrance" , "aromatic resin" .)