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Energy prices soar but no help for pellet users

  • Post category:Economy News
  • Reading time:2 mins read

A few years ago, pellets were seen as a safe and cheap source of energy. The raw material was not lacking, the demand increased but in a reasonable way and nothing allowed to guess that in a few months the price of wood pellets was going to double, triple or even more. The 15kg bag currently reaches 12 euros and the pallet of 66 bags 817 euros, whereas prices were three times lower a year ago.

How to explain this increase? There is of course the increase in production costs. Pellet suppliers are themselves faced with rising energy prices, whether for manufacturing, drying, packaging, storage or transport, but this is not enough to justify a tripling of prices .

It also has strong demand pressure. For fear of seeing prices soar with the approach of winter, many consumers bought large quantities of pellets this summer to take shelter. Add to this the new users who have swapped their oil or gas boiler for a pellet installation, attracted by the promise of savings, and we understand that the supply chain is struggling to keep up and that prices are rising according to the famous law of supply and demand.

Especially since a non-negligible part of the pellets sold in Europe traditionally come from Eastern Europe and these sources are becoming less abundant and more expensive, these countries having their own domestic demand which is increasing, especially since the doors with Russia and Belarus are closed. All this without forgetting a certain amount of speculation which can push suppliers to keep stocks which they are sure to sell at a higher price later.

In short, high prices are not going to decrease this winter, on the contrary they should rise again, boosted by growing demand, by supply under pressure and by general inflation.