From 300 to 700 euros per ton of pellets: how producers justify the sharp rise in their prices

From 300 to 700 euros per ton of pellets: how producers justify the sharp rise in their prices

Households equipped with pellet stoves for better and cheaper heating are worried about sharply rising prices and emerging shortages. This local sector is accused of taking advantage of the crisis and customers of panicking due to overstocking.

The fear of running out of stock and paying more encourages overstocking and then shortages. Does this rule, which has already had an effect on mustard or toilet paper, now also apply to pellets, these wood pellets intended for heating supply?

For several months, the prices of this fuel, 85% produced in France, have risen steadily and the rises are endless. In one year, the price of a one-tonne pallet packed in a 15-kg bag has gone from about 300 euros to more than 600 or 700 euros. But we still have to find some. Most suppliers are out of stock and are delaying deliveries.

This situation is the result of the tensions caused by the war in Ukraine, the energy crisis and inflation. To protect themselves against sharp increases, users often ask for more and sooner than usual.

Homogenize rising prices

Producers, accustomed to selling their pellets gradually, face a strong one-off demand that they cannot meet as quickly with local production. These professionals, who produce 85% of the pellets, import at high prices to meet demand.

“We have been producing more for months. This year, production will increase by 300 tons. To avoid shortages, the sector has reduced exports by 16% and imports more, but at prices that are constantly rising. Then, the distributors are forced to standardize prices on the rise and with the addition of the law of supply and demand we end up with invoices twice as many as a year ago”, acknowledges Éric Vial, General Delegate of Propellet.

Éric Vial observes with regret that all the ingredients are there to achieve this situation. The more the demand increases, the rarer the product, the higher the prices and the more users try to stock up so as not to pay more and not run out of fuel in the middle of winter. The story of the snake that bites its tail.

Crisis takers?

But this sector is already accused of taking advantage of the crisis to increase its margins. In a post on LinkedIn, Éric Vial refutes this accusation.

“We hear that pellet producers and distributors intentionally block pellet volumes to raise prices. Stop!”, reacts the general delegate, pointing to the irrational panic of consumers. “The distribution sector has been battered for months by stressed customers, supposedly short of pellets…while the outside temperature is 30-40°C?!?!

The professional rejects any risk of scarcity, recalling that in addition to imports, there is also an increase in national production of 300 tons. In 2021, pellet consumption reached 2.4 million tons. By 2024, the sector expects to increase its capacity by one million tons.

“The pellets are not mustard: on the one hand, there is and on the other hand, we do not need pellets throughout the year. (…) Instead of treating French professionals as thieves, it would be better to be proud of a production sector and distribution that does everything possible so that every French consumer has plenty of pellets this winter, which is already compromised by the abusive purchases of some”, warns Éric Vial.

A call to sobriety

To curb the rises and avoid an already perceptible shortage, Éric Vial asks consumers not to panic due to excess stocks and to adopt a more sober behavior regarding heating.

When changing to pellets, they usually raise their temperature between 2 and 4 degrees. A drop of 2 degrees and an extra sweater means 14% less fuel consumption. Throughout the year, several hundred euros are saved,” suggests Éric Vial.

Other representatives of the sector are opening more radical paths. In a press release quoted by the BatiActu site, the FF3C (federation of fuels and heating fuels) proposes that customers whose pellet is the only source of heating have priority. It also advises postponing stove or boiler installation projects so as not to further increase demand. Between 2020 and 2021, sales of pellet stoves increased by 41% and those of pellet boilers by 120%, with 180,000 and 32,000 pieces respectively.

Prices are likely to continue to rise further during this crisis. Will they return to 2020 levels? Eric Vial in doubt. “Prices never go down to the price they were before”, regrets the delegate.

“We can understand the anguish of the family who switched to pellets to reduce their energy budget and find themselves with the same bill as before. However, they made the right decision, otherwise their bill would have been much higher.”

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