The 2022 Russian invasion of Ukraine is likely to have a profound impact on the European wood fuel market.
Historically, Ukraine, Belarus, and Russia have been some of Europe's largest sources of firewood and wood briquettes. As a result of Vladimir Putin's war, virtually the entire stream of wood fuels from these countries ceased overnight. On top of this, due to rising energy prices, the costs of manufacturing, packaging, and shipping wood fuels have increased sharply as well.
Having over twenty years of experience in the European fuelwood industry, Wood Fuel Market's experts know the continent's market better than anyone. In this article, we will share some of this expertise with you, discuss the current market conditions, as well as what steps your business can take to hedge against potential product shortages.
Current Market Conditions: Potential Supply Crisis
During the last few years, the wood fuel industry has benefited greatly from the increased prices of hydrocarbons.
With gas and electric heating becoming prohibitively expensive in Europe (while the prices of fuelwood remained relatively stable), hundreds of thousands of households had turned to wood fuels for their heating needs in the last two years. As a result, many stove manufacturers and wood fuel suppliers have reported record sales. This is a blessing that, according to some analysts, might soon become a curse for the industry.
2022 Russian invasion of Ukraine has prompted yet another spike in the price of hydrocarbons, which will once again increase the demand for wood fuel. However, meeting this demand may become incredibly difficult.
A very large portion of fuelwood sold in Europe up until now originated in Russia, Belarus, and Ukraine. As all three of these countries are now involved in Vladimir Putin's war, we are finding ourselves in a situation where demand is record-high while supply is severely limited.
This will, without a doubt, increase the cost of wholesale wood fuels from the remaining channels. As a result of increased prices, some European suppliers will, of course, be incentivized to increase their production numbers. However, this will require time and much of the wood supply will be eaten up by the furniture industry and to produce supermarket logs. And there is a limit to how much extra fuelwood they will be able to put on the market.
What does this mean for the average European wood fuel supplier? The vast majority of experts agree that wholesale firewood and briquette prices are likely to be noticeably higher than what European businesses are used to.
But what's most disturbing is the possibility that—as a result of losing imports from Russia, Belarus, and Ukraine—there might not be enough wholesale fuelwood on the market to satisfy everyone's needs. Faced with this reality, sellers operating on large profit margins may be able to survive by importing firewood at higher prices from outside of Europe. And sellers operating on tight margins, who cannot afford this, might have to temporarily close their businesses and reopen next year.
How to Protect Yourself From the Fuelwood Shortage?
At the current juncture, our partner network still has ample bandwidth of wood fuels that you can buy wholesale.
What's more, all of the currently available wholesale firewood and briquettes have been sourced and manufactured at last year's prices. And this allows us at Wood Fuel Market to sell them to our business partners at last year's prices as well.
So don't wait until the last moment before sourcing your products this year. Get in touch with us now and we will help you source the best wood fuels from our trusted network of suppliers.