White paper explores wood pellet offtake pricing relationships
February 22, 2023 By FutureMetrics
There has been much discussion recently about the offtake pricing relationships between pellet producers and pellet buyers.
Many years of near zero inflation resulted in some complacency in how offtake price adjustments were defined in the bilateral contracts between the pellet fuel producers and buyers. It became common to define an annual fixed adjustment to the sales price of the pellets; often in the range of 1.5 to 2.5 per cent. With hindsight, it is obvious that this exposed producers to risk if the average cost of production increased faster than the price.
This brief white paper will set the foundation for the reader to use the dashboard that complements this analysis. Experiment with changing inputs to see the impacts on producer and buyer cash flows.
Download the white paper on the FutureMetrics website: www.FutureMetrics.com.
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