Japan’s production capacity of woody pellets has increased rapidly in recent five years. Annual production of woody pellets in FY2003 was 2,400 ton, and it escalated every year: 3,700 ton in FY2004, 8,700 ton in FY2005, 8,700 ton in FY2005, 22,500 ton in FY2006, 32,600 ton in FY2007, and came up to 60, 000 ton in FY2008, nearly 25 times as much as that of FY2004. Meanwhile, the number of pellet factories was 10 in FY2003, 13 in FY2004, 18 in FY2005, 38 in FY2006, 47 in FY2007, and increased to 55 in FY2008, more than five times as many as that of FY2003.

Looking at the distribution of pellet factories all over Japan, eight exist in Hokkaido, four in Iwate, three in each of Miyagi, Nagano and Kochi prefectures, respectively. Woody pellets are mainly burnt as fuel in small boilers and stoves at present.

On the other hand, Japan imports woody pellets from overseas and the amount has been increasing rapidly. Annual import of woody pellets stayed around 10,000 ton per year during the period from FY1998 to FY2006, but increased to 14,000 ton in FY2007, 41,900 ton in FY2008, and now in FY2009, it has already scored 49,000 ton during the period from January to October.

There are reasons why the import of woody pellets is rapidly increasing:

The average price (CIF : Cost, Insurance and Freight) of imported pellets was some forty yen per kg during FY2007. Thereafter, pellet price steadily decreased to 27.6 yen/kg in FY2008, and 21.8 yen/kg in FY2009.

Meanwhile, the price of domestic woody pellets at the factory gate has been around 25 ~ 30 yen/kg in general. Consequently, big pellet-consumers like power stations tend to call for imported pellets.

Fig. Record of Domestic Woody Pellets Production

Fig. Number of Domestic Pellet Factories

Fig. Record of Woody Pellets Import
(Sum from January to October in case of FY2009)

Fig. Price of Imported vs Domestic Woody Pellets

Sources: Website of the Japan Wood Pellet Association, the Japan Forest Products Journal, Ministry of Finance “Trade Statistics of Japan”, and etc