Pellet Prices in Latvia Rise by 40% Amid Cold Winter and Shortage

Wood pellet prices in Latvia have risen by almost 40% over the past year. If last season a tonne of pellets cost consumers around 220 euros, now manufacturers are offering them at 300–310 euros including VAT. Such an increase is felt primarily by households using pellets as their main or backup heat source.

Market participants cite several key reasons for the price rise. The past winter was colder than usual, triggering higher demand for wood fuel. At the same time, Latvia faced a pellet shortage during the previous heating season, which intensified market pressure and left a lasting impression on consumers.

Remembering last year’s difficulties, residents began purchasing pellets well in advance of the new heating season, creating unusually high market activity even outside the traditional seasonal peak. For players in the biofuel sector, these developments reflect a shift in the balance of supply and demand.

Didzis Palejs, head of the industry association LATbio, identified the surge in demand from private households as the main driver of the current price dynamics. The issue has also been acknowledged at the state level: Climate and Energy Minister Janis Vitenbergs confirmed the high demand for pellets and described the situation as socially and economically significant.

Analysts recommend that households dependent on pellet heating plan their purchases in advance: buying fuel before the cold weather sets in reduces the risk of facing even higher prices at the height of the season. Heating costs compared with last year will rise noticeably and may require adjustments to household budgets.

If stocks are not built up in good time, a sharp drop in temperature carries the risk of repeating the shortages the market has already experienced. Last season’s experience showed that waiting for the first frosts before starting to prepare for the heating season results in the highest costs.