ISET

In January, the cost of cooking one standard Imeretian khachapuri continued to increase, ranging between 3.56 GEL (Batumi and Tbilisi) and 3.92 GEL (Kutaisi), with the average cost being 3.67 GEL. The new average price is 1.9% higher than the price in January 2016. As for month-to-month development, the price of khachapuri is 1.3% higher compared to the previous month (December 2016).

Cheese is the main and most expensive component of Georgian khachapuri, driving the sharp seasonal fluctuations of the Khachapuri Index. The price of cheese shot up sharply in January 2017, after dropping (in annual comparison) from July 2016 (6 month). In previous publications, we discussed some possible reasons behind the cheese price decrease in yearly terms. One of those reasons is the increased amount of imported milk powder being utilized, which kept cheese prices below last year’s levels.

The average cost of cooking one standard Imeretian khachapuri in January 2017 across Georgian cities varied from 3.56 GEL (prices observed in Tbilisi and Telavi were exactly the same) to 3.92 GEL (observed in Kutaisi). The overall average price was 3.67 GEL, which is 1.3% higher compared to the previous month (December 2016), and 1.9% higher compared to same month last year (January 2016). The change in yearly terms was driven by small increases in three ingredients: cheese prices went up by 5.4%, followed by yeast (4.1%), and butter (3%).

The average cost of cooking one standard Imeretian Khachapuri in the last month of 2016 increased to 3.62 GEL, which is 4.6 % higher month-on-month (m/m, that is, compared to the previous month), and 4% lower year-on-year (y/y, that is, compared to the same month of last year).

The main contributors to y/y Khachapuri Index deflation were cheese (down 4.3%) and flour (down 9.2%). In previous publications we talked about milk powder as a possible reason for the annual decline of cheese prices, which are trending below last year’s trend from July.

Driven by the sharp seasonal increase in price of Imeretian cheese, the average cost of cooking one standard Imeretian Khachapuri in December 2016 stood at 3.62 GEL. The Index reached its lowest value (3.51 GEL) in Batumi; the maximum was observed in Kutaisi and Tbilisi (3.75 GEL and 3.63 GEL, respectively). The average price of 3.62 GEL is 4.2% higher compared to the previous month (November 2016), and 4.0% lower compared to December of last year.
As often discussed, the seasonal increase of the Khachapuri Index in the winter season is mainly driven by a sharp decline in the supply of fresh milk, which directly affects the prices of cheese and other dairy products. However, according to the last three years’ Khachapuri data, we observe that in December, the price of cheese is higher in Kutaisi than anywhere else in Georgia. Year after year, we see the price of cheese in Kutaisi exceeding the national average in December.

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