Latvia’s leading wood pellet producers, including Scandbio Latvia, Graanul Invest, Kurzemes granulas, and Bitus Latvia, have temporarily stopped accepting new orders due to exceptionally high demand and are now focusing on fulfilling existing contracts, according to information published by the companies.
Didzis Palejs, Chairman of the Board of the Latvian Biomass Association (LATbio), told the LETA news agency that pellet manufacturers are currently operating at full capacity.
He explained that Latvia’s total pellet production capacity is around 1.8 million tonnes per year, with just under half consisting of premium pellets intended for household heating. Domestic consumption is estimated at approximately 350,000 tonnes annually, meaning the country’s production capacity significantly exceeds local demand. If necessary, producers are also able to shift part of their industrial production to premium pellets for households.
According to Palejs, the main challenge is that consumers are attempting to purchase an entire year’s supply within a very short period, while manufacturers are physically unable to produce that volume of pellets in such a limited timeframe.
“Even if we had production capacity of two million tonnes,
factories simply cannot produce an entire year’s supply of pellets within a single month,”
he said.
Commenting on market trends, Palejs noted that most consumers have already secured the pellets they need, meaning demand is likely to ease in the near future. He also pointed out that pellet prices have begun to decline in Poland, a development that could eventually help reduce prices in Latvia as well. At the same time, weakening demand in export markets is expected to improve pellet availability for Latvian consumers.
He added that the biggest concern among customers is the waiting time required to obtain pellets rather than an actual shortage of production capacity.
According to Scandbio Latvia, pellet resellers are taking advantage of the current situation by actively seeking to purchase pellets directly from manufacturers in order to resell them at higher prices amid the market frenzy.
The company said it plans to allocate a larger share of its production to the Latvian market this year
than in previous years, but stressed that it is impossible to manufacture an entire year’s supply within one or two months.
Scandbio Latvia urged consumers not to fuel further price increases through panic buying. The company advised households to avoid purchasing their entire seasonal supply—and additional reserves—at the beginning of summer if they would normally buy pellets gradually throughout the year. According to the producer, if customers avoid excessive purchasing, prices are likely to stabilise or even decline.
The company recalled that a similar situation occurred in 2022, when many consumers bought enough pellets for two years at elevated prices. As a result, demand dropped sharply the following year.
According to Firmas.lv, Scandbio Latvia generated 14.88 million euros in revenue in 2025, down 1.6% from the previous year, while its profit more than doubled to 1.23 million euros. Founded in 1997, the company has share capital of 3.13 million euros and is owned by Swedish company Scandbio.
Founded in 2008, LATbio aims to promote the use and production of biofuels, including wood-based fuels, in the energy sector while representing the interests of biofuel producers and supporting Latvia’s energy independence through the use of domestic resources.
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