Wood price and pallet production: which roads can be traveled

04 | 03 | 2021



Starting from July 2020 we have witnessed a constant and gradual growth of the wood price, which reached an increase of more than 20% at the end of the year. The alarm is raised by the Pallet producers’ group of Assoimballaggi that highlights how the increase in the cost of raw material goes hand in hand with the surge in products made with it; in fact, the price of the wood has an incidence on the final pallet of about 70%. The growth did not stop even with the beginning of the 2021 and at the end of March the price could be even more than 30%. The difficulty of making predictions makes impossible the organization of the wood supply for the next few months, the pallet manufacturers risk to lack of the necessary material to continue production, thus not to be able to satisfy completely the customers needs, in particular those of the food and pharmaceutical sectors, which have never stopped even during the lockdown period being producers of essential goods.









Causes of increases in the cost of wood


What are the causes that have led to this increase in the prices of the raw material?


  • The strong demand of raw material from North America and China, which has not undergone contractions but, in some cases, has even grown.
  • In geographical areas such as Sweden, Germany, Ireland, USA and Canada, the offer of timber has decreased due to the reduction and, in some cases, even the interruption of normal production activities.
  • The anti-Covid19 regulations have also implied a reduction of the transportation, especially of those by containers, creating a relevant global difficulty with regard to provisions.
  • The definitive exit of the United Kingdom form EU has complicated and delayed further the transit of containers and goods.
  • Some traditional suppliers of Italy, such as Austria and Germany, have not increased production and, on the contrary, have started to look elsewhere for new horizons such as Asia to differentiate their reference markets.
  • In the construction sector, the expansion of the demand for low environmental impact houses has led to a rise in the construction of prefabricated wooden buildings.



Possible solutions



In Italy, the sector of pallet production depends significantly on the imports: in fact, 2/3 of pallets produced in our country is realized with timber imported from abroad.

What solutions can help a pallet producer at this moment?


  • Make grow the Italian production, managing the resources at our disposal in a correct, sustainable and responsible way. Our country benefits from a big woodland and forest heritage: 11 million of forestry hectares underused, which could become an important source of income and, if well managed, could contribute to safeguard the territory form landslides and fires.


  • Starting in the company a digital transformation and investing in technological machinery capable to optimize the usage of wood during the production process of the pallets. The optimizing saws allow to obtain the maximum wood yield, limit the waste of raw material and reduce the costs of both processing and materials. In addition to facilitating the activity of the operators, increasing their safety and ergonomics, these systems allow to monitor production and to collect data and parameters, useful information to control and improve the business of the company from an Industry 4.0 perspective.



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