In the fourth quarter of 2021, the prices of industrial wood pellets, compared to the end of 2020, have doubled, according to information published by the Forest Sector Information Center (MNIC).
Following the upward trend in prices in November, firewood prices increased by two euros per cubic meter in December, reaching an average of 30-31 euros per close cubic meter.
According to the data of the center, a more pronounced increase in Latvia, approaching 34 euros per cubic meter, is observed in the Latgale region, which has faced a decline in deliveries from Belarus and increasing competition from Lithuanian buyers. At the beginning of 2022, this trend is likely to continue, according to the experts of the center.
The experts of the Information Center mention that the total increase in firewood prices in Latvia is currently influenced by two significant factors – the seasonal decrease in firewood and wood chip stocks, as well as the change in total energy prices in Europe and Asia, which has been a very steep rising vector since September.
At the same time, the prices of energy wood resources, unlike natural gas and electricity, have not increased several times – stock exchange mechanisms are not used in the trade of wood products and deliveries take place on the basis of long-term contracts. However, according to the MNIC, although moderate against the background of other energy carriers, the increase in the prices of energy wood products is also noticeable for consumers – in the Baltic Sea region (Amsterdam, Rotterdam, Antwerp) spot prices for industrial pellets are now twice as high as at the end of 2020.
Fuel chip prices have also risen. According to MNIC estimates, fuel chip prices approached 12-13 per bulk cubic meter at the end of December, with a forecast to reach the level of 13-15 euros in the beginning of 2022.
The experts of the Information Center forecast that in January and February 2022 the dynamics of energy wood (firewood, wood chips) prices will be highly dependent on the weather conditions in Latvia. If the shortage of frost is pronounced, there may be problems with logging and logistics, which will reduce the supply of wood resources and may increase competition in their procurement.
“Let’s note that the prices of firewood in Lithuania and Estonia already exceed the level of Latvia by 5-10 euros per cubic meter,” adds MNIC.
It has already been reported that prices in the timber market continue to rise.
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