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The average cost of cooking one standard Imeretian Khachapuri in June 2018 stood at 3.15 GEL, which is 0.7% lower month-on-month (compared to the previous month), and 2% higher year-on-year (compared to the same month of last year).

The main contributors to the m/m Khachapuri Index deflation were cheese (down 0.6%) and flour (down 1.1%). The Kh-Index fell in all Georgian cities. At 3.27 GEL, Telavi saw the largest drop in the Index (-1.4%). Tbilisi (3.29 GEL) and Batumi (3.27 GEL) experienced declines of 0.4 % and 0.2%, respectively. Kutaisi was the cheapest city at 2.87 GEL (down by 0.8%). The price difference between the most expensive (Tbilisi) and the cheapest (Kutaisi) city reached 0.42 GEL.

In May 2018, the average price of cooking one Imeretian khachapuri stood at 3.17 GEL. Compared to the previous month (April 2018) the Khachapuri Index lost 3.6%. In annual terms (compared to May 2017), however, the Index added 0.9%.

The monthly (negative) change in the Index follows the traditional seasonal trend in fresh milk production, which peaks in June and July. Practically all khachapuri ingredients went down in price compared to last month: cheese (-6.1%), eggs (-0.2%), milk (-1.3%), butter (-2.3%) and flour (-0.4%).

The average cost of cooking one standard Imeretian Khachapuri in May 2018 stood at 3.17 GEL, which is 3.4% lower month-on-month (i.e. compared to April 2018). The Khachapuri Index is actually up by 1.1% year-on-year (compared to May 2017), suggesting a slight uptick in annual inflation. The supply of fresh milk is approaching its seasonal peak, and this peak might be earlier than usual this year because of the early spring.

The price of khachapuri has been declining in a continuous manner since January 2018. The cheapest city remains Kutaisi, with an average of 2.90 GEL for one standard Imeretian khachapuri. However, as we predicted in our previous publication, the price decrease in Kutaisi has been transmitted to other cities in Georgia. The largest monthly decrease was observed in Tbilisi, where the Index declined by 7.6% compared to last month. In Telavi, the index went down by 1.4%, and in Batumi, by 3.8%, compared to April 2018.

The average cost of cooking one standard Imeretian khachapuri in April 2018 across Georgian cities varied, from 2.90 GEL (the lowest price, observed in Kutaisi), to 3.60 GEL (the highest price, observed in Tbilisi). The price difference between Kutaisi and Tbilisi amounted 0.70 GEL, which is one of the highest differentials we have ever observed between these cities. The overall average price was 3.29 GEL, which is 7.4% lower compared to the previous month (March 2018), and 1.0% lower compared to same month last year (April 2017).

As shown on the graph, year-on-year prices were consistently higher in 2017-2018, compared to 2016-2017 prices, until April, 2018. April is the first month in above-mentioned time period when we observe deflation compared to last year. The main contributors to y/y Khachapuri Index deflation were cheese (down 0.9%) and flour (down 4.2%). The price of cheese dropped dramatically (down by 32.9% m/m) in Kutaisi, compared to other cities.

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