2017 03 21

The turnover of BALTPOOL Energy Exchange, which grew in January, dropped by 7% in February and amounted to EUR 6.4 million, but, according to experts, this was only due to the fact that, since February is shorter than January, there was one auction fewer than in January. The main change in trade was that short-term contracts were replaced by long-term contracts, under which biomass was purchased for the summer season.

Another distinct trend is the increased activity of Latvian sellers during the heating season. In February, 4 Latvian sellers concluded contracts. Latvian suppliers are most active in Lithuanian counties near the Latvian border. For instance, approximately 40% of the actually delivered biomass in Telšiai County during the 2016–2017 heating season accounted for biomass supplied by Latvian sellers.

It is likely that the active participation of Latvian sellers during the heating season is related to price fluctuations in individual seasons. A comparison of the Latvian woodchips price index to the biomass exchange price index shows that the fluctuation range in Latvia is up to 8.5%, while in the summer season in Lithuania the fluctuation range is up to 36.03%. Contract duration is likely to have the greatest effect on this. In Latvia, most contracts are concluded for one year, while in Lithuania there is a certain selection of contract durations (half-year, one-quarter, one-month and one-week). It is evident that shorter contract durations promote seller competition and enable us to fairly accurately predict the market price of woodchips for forthcoming delivery periods.