ISET

The average cost of cooking one standard Imeretian Khachapuri in May 2020 stood at 4.18 GEL; 6.8% lower month-on-month compared to April. However, the Khachapuri Index did increase by 24.9% year-on-year (compared to May 2019). At this time of the year, the monthly downward trend in the Index is typically driven by a seasonal decline in cheese prices (due to the increased supply of fresh milk and a resulting lower demand for imported milk powder).

However, while such seasonal factors explain the MoM decline in the Index, they do not account for its YoY increase. Taking a more detailed look at prices, all ingredients contributed to the YoY inflation in May: cheese (+41.9%), butter (+15.5%), flour (+14.1%), eggs (+12.4%), yeast (+10.4%), and milk (+4.8%). As the chart reveals, the price increases are particularly high for internationally traded commodities (butter) and those that use imported intermediate inputs in production (flour and milk).

Imported items rose in price due to depreciation of the lari against the US dollar, in excess of 16% in May 2020 compared to May 2019. The GEL continued to depreciate relative to the USD: with the average GEL/USD exchange rate in May 2020 being 3.20 (2.75 in May 2019). A further reason for upsurges in price relates to potential logistical problems. During the pandemic, due to safety procedures, the transportation of food products was hindered, leading to shortages in supply and therefore higher prices.

According to the official Consumer Price Index (CPI), which relies on a more comprehensive basket of goods and services, compared to April 2020, food prices did not change in May. However, in yearly terms, there was inflation of 14.7% on food prices. A closer look at the category of milk, cheese, and eggs shows that prices increased by 24.6%, which is remarkably close to our estimate.

 

More Khachapuri Index Articles

  • June, 2020 | Will the Downward Trend Continue?

    In June 2020, the average cost of cooking one standard portion of Imeretian khachapuri was 3.93 GEL. Compared to the previous year (June 2019), the Khachapuri Index gained 13%. While going up in yearly terms, the Index actually dropped by 4.2% compared to the previous month (May 2020).Prices of all khachapuri ingredients except for flour decreased in June 2020 (compared to May 2020): cheese lost 6.2%, butter lost 1.1%, eggs lost 7.4%, yeast lost 2%, Read More
  • May, 2020 | The Khachapuri Index Increases by 24.9%

    The average cost of cooking one standard Imeretian Khachapuri in May 2020 stood at 4.18 GEL; 6.8% lower month-on-month compared to April. However, the Khachapuri Index did increase by 24.9% year-on-year (compared to May 2019). At this time of the year, the monthly downward trend in the Index is typically driven by a seasonal decline in cheese prices (due to the increased supply of fresh milk and a resulting lower demand for imported milk powder). Read More
  • March, 2020 | The Khachapuri Index Increases by 26.6%

    The data behind the Khachapuri Index is ordinarily collected in open bazaars. However, given the coronavirus situation and the related recommendations, our researchers can no longer visit bazaars to collect data. To overcome this challenge, around the end of March 2020 we constructed a short online survey and asked our readers to fill out a questionnaire on the prices of khachapuri ingredients observed in bazaars from various Georgian cities. The data obtained show that the Read More
  • February, 2020 | Khachapuri Index Increases by 22.9%

    The Khachapuri Index reached a new historical high in February 2020. The Index continued its upward trend, reaching an average cost of 4.35 lari in February 2020. This is 1.3% higher than in January 2020 (m/m) and 22.9% higher when compared to February 2019 (y/y). The main contributors to the Khachapuri Index’s inflation since last year were cheese (36.5%) and flour (10.7%). Furthermore, as shown in the chart, the year-on-year price of all khachapuri ingredients—milk Read More
  • January, 2020 | The Khachapuri Index for Foreign Earners

    In January 2020, the cost of cooking one standard Imeretian khachapuri continued to increase, ranging from 4.21 GEL (Kutaisi) to 4.38 GEL (Batumi), with the average cost being 4.30 GEL. The new average price is 18.3% higher than the price in January 2019. While in month-on-month development, the khachapuri price is 0.7% higher than December 2019. The yearly price increase is driven largely by the deprecation of the Georgian lari against the US dollar. The Read More
  • 1
  • 2

Our Partners