Russian pellet production, exports expected to grow

By Erin Voegele | July 21, 2017

The Russian Federation recently filed its annual biofuels report with the USDA Foreign Agricultural Service’s Global Agricultural Information Network, reporting wood pellet production and exports are expected to increase by 10 percent this year, reaching 1.45 million metric tons. The increase is expected to be driven primarily by strong demand from Europe and more interest from Asian markets, along with a soft ruble and increasing local consumption.

While Russian pellet production is expected to increase this year, the report indicates a lack of domestic pellet standard, poor transportation infrastructure, a lack of warehouses and the product’s seasonality will work to negatively impact development of the sector.

According to the report, Russia is currently the third largest exporter of wood pellets to the EU, following the U.S. and Canada. The country accounts for approximately 6 percent of the world’s pellet exports, 3 percent of global production, and ranks eighth globally for total wood pellet production.

Russian wood pellet production is expected to increase by as much as 4 million metric tons by 2020 and 8 million metric tons by 2025. The country produced approximately 1.013 million metric tons of wood pellets last year, up 3.5 percent from 2015. Production statistics, however, may not be entirely accurate. The report notes that statistics captured by Russia primarily capture large-capacity facilities, while mid-sized and smaller facilities that operate as part of larger wood processing plants do not report their production.

The full report can be downloaded from the USDA FAS GAIN website.