Last year turned out to be mildly speaking difficult for the Ukrainian sellers of straw pellets. The poor harvest of grains in 2012 as well as the drop in demand for solid biofuel from Poland’s part forced domestic pellet producers to reduce their production volumes significantly, and in some cases to close the plants completely. Today Ukraine rapidly loses its strategic location in the key sales market. For reference, earlier about 80% of the fuel pellets and briquettes were exported from Ukraine to the Polish state. In 2013 this figure almost halved.
According to the database of straw pellet buyers-importers 2010-2013 prepared by Ukrainian Biofuel Portal pellets-wood.com, in 2013 (I-III quarters) 23 foreign companies imported agglomerated straw fuel granules from Ukraine. In 2012 56 such companies were registered. Moreover, if we consider the database, we will see that in 2013 the average amount of the production imported by one company was 210 tons, this is by 42% less than the same indicator in 2012.
The cancellation of the benefits for the Polish heat generating stations using co-firing technology also influenced the market value of the Ukrainian straw pellets. Last year the price of such production on the Polish market fell by 20-25%, that forced domestic biofuel producers to sell their pellets almost at cost.
Now Ukrainian pellet traders have to look for the new sales markets and increase sales volumes within the country. According to the experts, such states as Germany, Italy, Austria and Turkey should be considered by the Ukrainian pellet sellers as prospective importers. However, in this case there may be a trouble as for the time being most Ukrainian solid biofuels still fall short of the European standards, that is why such pellets and briquettes may not compete with the products from the U.S., Canada and Russia.
Nevertheless, according to the marketers of Ukrainian Biofuel Portal, straw pellets is still the most promising kind of solid biofuel in Ukraine. The fact is that straw is the only one raw material for pellet production, the volume of which is enough for everyone in the country. At the same time, the experts suggest that in 2012 there appeared too many businesses intended to produce fuel granules in Ukraine, as the demand for this production from the EU was really huge. According to the database of straw pellet buyers-importers prepared by Ukrainian Biofuel Portal, in 2012 the number of companies which purchased Ukrainian pellets of straw doubled. Now the picture in the domestic market of straw pellets is not so magnificent, and the situation will allow only really strong players to survive.
Author: Ivan Prokhorov
