Montenegro is considering suspending wood pellet exports to increase availability on the domestic market after regulated retail prices failed to resolve reported shortages. The proposed intervention could significantly affect the country’s wood-processing industry, which exports most of its production, while domestic consumption accounts for only 15–20% of total output.
The proposed export suspension would follow consultations between the Ministry of Agriculture, Forestry and Water Management, the Ministry of Economic Development and officials responsible for market inspections. The government is considering the measure as heating demand increases, with households and public institutions continuing to report difficulties obtaining pellets at regulated prices.
Price Controls Fail to Resolve Domestic Supply Problems
The government introduced maximum retail prices of €250 per tonne for A2 pellets and €270 per tonne for higher-grade A1 pellets, including VAT. The measures were designed to protect households and public institutions from rising heating costs. Complaints about insufficient supplies continued despite ongoing domestic production and exports.
Producers can obtain more favourable commercial conditions in foreign markets, creating incentives to prioritise export sales over domestic deliveries. Reports have also included complaints about suppliers refusing to load pellets, imposing packaging requirements or requesting additional delivery payments.
The government subsequently amended its price-control regulations to prevent producers and retailers from adding separate charges to regulated prices. The revised rules also require companies to maintain domestic deliveries at no less than their average levels over the preceding 12 months.
Export Restrictions Could Reduce Manufacturers’ Revenues
The proposed export suspension would represent a more direct intervention in the wood-processing sector, where foreign markets account for the majority of pellet sales.
Export markets provide manufacturers with an important source of revenue, while domestic price ceilings can limit their ability to pass on higher costs for timber, labour, electricity, packaging and transport.
Redirecting additional production towards domestic buyers could improve local availability. However, an export ban could also reduce manufacturers’ revenues and place pressure on production if regulated domestic prices fail to cover operating costs.
The economic impact would depend on the duration of export restrictions, existing export commitments and manufacturers’ production levels. Montenegrin pellet producers also compete with suppliers across the Western Balkans and neighbouring European markets, where pellet prices and seasonal demand differ. Export restrictions could affect contractual relationships with foreign distributors and the predictability of Montenegro’s pellet supplies to international markets.
Government Decision on Export Ban Remains Pending
A final export prohibition has not been confirmed. Any suspension would require a formal decision by the competent authorities, while its duration, scope and possible exemptions remain unresolved. The government may also need to reconsider regulated pellet prices as part of a more sustainable arrangement.
The immediate objective is to secure sufficient heating fuel for households, schools and healthcare facilities while preserving the commercial viability of domestic pellet manufacturers. The proposed intervention therefore places domestic energy affordability, industrial profitability and export interests at the centre of Montenegro’s pellet market policy.
