Pellet hits 44,000 dinars a ton, with no shortage

A ton of wood pellets at most fuel yards in Serbia now sells for between 40,000 and 44,000 dinars (roughly 341 to 375 euros), in July, the month that is traditionally the cheapest in this trade. Pellet prices usually sit flat or drift down while the stoves are cold, and only climb once the weather turns. This season it worked the other way around.

The move happened fast. In early July, yards were asking 38,000 to 42,000 dinars a ton, while pellets bought straight from the plant in the same period went for 34,000 to 36,000 dinars. Since then, the top of the retail range has been pushed up by another 2,000 dinars a ton.

Why is the pellet price rising when supply is fine?

Branko Glavonjic, a professor at the Faculty of Forestry, argues the cause is not the volume of goods on the market but the timing of consumer buying.

Many consumers, taught by the experience of previous years, when demand spiked sharply in October and November, leading even to shortages accompanied by sudden price increases for pellets, started buying earlier this year. Producers and traders used that to raise prices without justification or grounds.

Buyers did exactly what they are told to do every autumn: stock up outside the peak. According to the professor, that is precisely what was exploited.

Both producers and traders have lost any sense of measure and any reference point on price levels and have, in a way, punished consumers for starting their pellet purchases on time this year

How much pellet is actually available

Enough to undercut the shortage story. Larger yards have no waiting lists, and the assortment is wider than the public assumes.

Because of increased demand for pellets, at some yards that carry 15 types of pellets from different producers, there are seven to eight different types available at any moment, so consumers can buy in unlimited quantities.

If a customer insists on a specific producer that a yard does not have in stock, delivery takes up to five working days. Smaller yards are the exception, but the reason is not a lack of goods:

At some smaller yards there are occasional supply problems, but that is the result of the weak financial capacity of those yards and poor planning of their purchasing, not a lack of pellets

What the price spread costs a household

The number that matters most to a buyer is not the average but the spread. The same pellets, from the same producer, can differ by 2,000 to 3,000 dinars a ton between two yards. A household buying three tons therefore pays 6,000 to 9,000 dinars (about 51 to 77 euros) more or less, depending on how many phone calls it made before ordering.

The July climb sits on top of that. Anyone who took three tons at 42,000 dinars three weeks ago paid 126,000 dinars; a buyer today at 44,000 pays 132,000 dinars (about 1,126 euros). A gap of 6,000 dinars is not a heavy monthly item, but it is money changing hands in a market with no shortage behind it.

What comes next

The Ministry of Mining and Energy has not commented publicly on the price jump. Glavonjic expects the talks to open only now:

I expect that in the coming weeks there will be meetings of producers, traders, the Ministry, the Serbian Chamber of Commerce, the market inspectorate…

Until then, his advice to consumers is not to borrow money for heating fuel at these prices, and to compare offers before buying.

Before they start buying pellets, they should check prices at different yards, because pellets from one and the same producer carry different prices at different yards. That difference is sometimes 2,000 to 3,000 dinars a ton

The next measurable signal will be those meetings and any move by the market inspectorate. If the pellet price is still 44,000 dinars in September, when demand genuinely picks up, this year’s early buying will have bought nothing at all.