Pellet Price Up 61% in a Year, Ton Reaches 44,000 Dinars

A ton of wood pellets in retail in Serbia costs 40,000 to 44,000 dinars in mid-August, putting the year-on-year price increase at roughly 61 percent. Last season the same quantity sold for about 26,000 dinars, and distributor price lists now typically show around 42,000 dinars. A few wholesalers still have ton prices at 37,000 to 38,000 dinars including value-added tax, but those offers are tied to a specific producer and limited quantities.

The increase didn’t happen all at once. Demand hasn’t let up since June, and pellets have gotten several thousand dinars more expensive per ton since the start of summer. Buyers got an early start on stocking up this year, remembering last season’s delivery delays, so some of the winter demand spilled over into July and August.

“Demand has been somewhat higher over the past month, because a good number of our customers decided to buy their pellets on time, so whatever the factories deliver to us during the work week, we try to get out to the end customers,” says Sasa Petrovic, of a heating-fuel wholesaler in Belgrade. Orders reach the customer’s address in two to five days, depending on the type of pellet.

Has the Pellet Price Rally Stopped?

Market analysis by the Faculty of Forestry shows that the key wholesalers are generally well supplied, and that shortages are showing up at smaller sales points instead, ranging from building-material yards to agricultural supply stores. Some of these outlets charge high markups, which has led certain factories to cut off further deliveries to them.

Branko Glavonjic, a full professor at the University of Belgrade Faculty of Forestry, describes the current situation this way:

“Pellet prices have mostly stabilized over the past two weeks, and whether they rise further before the start of the heating season will depend on demand, though both producers and traders are aware that another increase would be unsustainable for consumers. Supply and demand for firewood, on the other hand, are stable, with a slight price increase in early August of 500 to 700 dinars per cubic meter. Because of high electricity and pellet prices, firewood is currently the most economical fuel.”

That stabilization, he says, doesn’t apply equally to every sales point.

“The good news is that most key wholesalers haven’t raised pellet prices in the past two weeks, but the same can’t be said for some smaller dealers in smaller towns, where prices are climbing almost weekly.”

The price gap for the same product between two warehouses can run as high as 3,000 dinars per ton. Buying directly from the factory is up to 10,000 dinars cheaper than retail, and at the producer a ton of pellets runs around 270 euros plus value-added tax.

How Much Does a Cubic Meter of Firewood Cost Now?

Suppliers have raised firewood prices by 500 to 700 dinars per cubic meter since the start of August, putting the cost of a cubic meter in major cities at 7,000 to 10,500 dinars. The lowest price is for direct purchases from Srbijasume, where a cubic meter costs 5,269 dinars including value-added tax.

The unit of measure matters when comparing offers, because wholesalers often quote prices per stacked cubic meter rather than per solid cubic meter. A stacked cubic meter is a pile of wood where part of the volume is air between the logs, so it holds less actual wood than a solid cubic meter. Two prices that look identical on paper can therefore represent different amounts of wood.

Prices per stacked cubic meter including value-added tax, according to wholesalers’ price lists:

• Belgrade, first-class oak and hornbeam: about 9,900 dinars
• Zemun, beech on a 1.8 stacked-cubic-meter pallet: 22,000 dinars per pallet, or about 12,200 dinars per stacked cubic meter
• Novi Sad, beech wood: 8,000 to 9,000 dinars
• Nis, split beech and oak: about 9,000 dinars

Kiln-dried beech at the same Zemun wholesaler costs 26,000 dinars for a 1.8 stacked-cubic-meter pallet. The final price also depends on whether the wood is sold in meter lengths, cut, or split, and whether delivery is included.

What Srbijasume Says

The state-owned company says there’s enough wood to go around and directs buyers to its network of local units.

“We have 17 forest estates and 67 forestry offices. In every local municipality that hosts the seat of an estate or a forestry office, residents can contact our sales departments, who will tell them how to pay and where to pick up the wood they’ve bought,” says Gordana Jancic, director of the Forestry Sector at Srbijasume.

The relevant ministries have ordered an emergency inspection of the firewood and pellet market. The inspection is targeting exactly the part of the market where prices change almost every week, meaning the smaller sales points outside the main distribution chain.

On the supply side, the pressure on pellets is expected to ease. Two large factories that were undergoing maintenance over the summer have finished the work and are returning to full production, which should boost deliveries to wholesalers before the heating season starts. The next test will come in September, when households that haven’t yet ordered their heating fuel enter the market.