UK Experiencing Record Wood Pellet Shortage

The United Kingdom is currently seeing a 50 percent decrease in the supply of wood pellets across the continent by most European bagged wood pellet suppliers, leaving the local market fluctuating in price.

The UK is a major player in the wood pellet industry; as a country, it imports more than it exports, making it vulnerable to drastic price changes when the industry struggles to reach equilibrium between its supply and demand.

Silo manufacturers in the United Kingdom and similarly structured European nations should expect to see fluctuations in the market with consistently high prices until the month of April.

There are many reasons that contribute to this shortage of wood pellets. One of the main reasons causing this shortage is the unusual weather patterns being seen across Europe. The Latvian nation has experienced so much flooding that the government has declared a state of disaster. This flooding has allowed Latvian suppliers to be excused from non-supply penalties in their contracts, leaving the market without wood pellets to sell.

This problem isn’t exclusively occurring in Latvia, either; it’s happening across Europe. The unseasonably warm and wet weather means that the ideal, frozen conditions required for smooth timber operations has been paused. Without the frozen ground, machinery used in timber production could get stuck, break down or move very slowly.

Even once the weather returns to more favorable conditions, there is a generous time gap between when the timber is felled to when a pellet can be produced and sold. Those involved in the wood pellet market should have patience for the market to return to its normal equilibrium.

Another reason for the serious wood pellet shortage is the development of biomass fueled power stations. Previously, there was an abundance of wood pellets, and any given wood pellet silo had access to more than enough to sell. However, with the development of biomass fueled power stations, the demand for the same material, wood pellets, has increased significantly. Now, there are two markets competing for the same material, leaving fewer wood pellets to go around to every silo, fuel station and other supplier around Europe.

Those involved in the wood pellet industry, whether consumer, producer or supplier, should expect the market to begin to return to normal in April of this year.