Straw pellets in 2013 - the demand is still high yet prices fell
According to analysts of Ukrainian bioenergy market, 2013th year appeared rather difficult for straw pellet producers. The demand for this production from Europe is still high, however, such business becomes less and less profitable. The main problem is that the purchase prices of straw pellets in the EU seriously fell. European countries gradually give up subsidizing bioenergy. Today thermal power plants and industrial enterprices in Europe still wish to use straw pellets, yet due to the cancellation of the state support of renewable energy the companies now are not ready to buy biofuel at the same favorable for Ukrainians prices.
It is rather logical that the sales of Ukrainian straw pellet producers decrease. Moreover, the plants are gradually closed, restructured for a different function or frozen in anticipation of better times. Not long ago Ukrainian Biofuel Portal recorded 31 working straw pellet plants by the end of 2013. It should be mentioned that from 2009 to the 3d quarter of 2013 the proposals of straw pellet sales were received by the portal from 93 companies.
While interviewing the representatives of the enterprises (within preparation of the database of straw pellet producers and suppliers 2009-2013), it was found out that today the demand for Ukrainian straw pellets in Europe is rather high, however, the average purchase price fell significantly. According to pellet producers words, the buyers from Poland and other EU countries always try to bring down the price. Moreover, as Lyudmila Litvin, the director of straw pellet plant Buys ltd., explained, more and more intermediaries who resell Ukrainian production to Western Europe appear in Poland. As a result, the purchase price for pellets constantly decreases, the rates below cost are offered more and more often. Besides this, the opinion that the full domestic market in Ukraine still doesn't exist, was expressed repeatedly. That's why in order to survive, the companies must deal with the export to Europe facing whatever market conditions.
Recall that in summer 2013, following the Netherlands Poland announced about the cancellation of the government bioenergy support. If the decision of the Netherlands influenced the world's major biofuel producers, the termination of subsidies for bioenergy in Poland mainly affected small and medium-sized Ukrainian plants. Over the past few years Poland was the largest buyer of agricultural and wood pellets from Ukraine. Now Ukrainians are forced to seek new sales markets, as well as develop the domestic market of biofuels.
