In August 2016, the average cost of cooking one standard Imeretian khachapuri increased to 3.15 GEL, which is 4.8 % higher month-on-month (m/m, that is compared to July 2016), but 9.6% lower year-on-year (y/y, compared to August 2015).

The most interesting finding emerging from the August data concerns price dispersion across Georgia’s major cities. Our data come from Batumi, Kutaisi, Tbilisi and Telavi, and, as is easy to see on the chart, not only are prices in all locations moving in tandem over time (this is nothing unusual), but also the gap between the cheapest and the most expensive cities (for khachapuri lovers, that is) reached an all-time minimum of 10-15 tetri per one khachapuri portion. This is far lower than the 40-50 tetri gap we have been observing through much of the Khachapuri Index history.

On the back of a sharp y/y decline in the price of Imeretian cheese (down by about 10 and 18% in July and August 2016, respectively), the Khachapuri Index took a big hit in August 2016. Having reached the seasonal bottom in May, the Index increased in June due to regular seasonal factors (tourism-related increase in demand and a gradual slowdown in domestic milk production). Yet, its behavior in July and August represents a major departure from the multi-year pattern we have been observing since 2008. In July, instead of going up, the Index dropped 3 tetri (to 3.01 GEL). The modest monthly increase of 14 tetri in August left the Index well below its last year value: 3.15 compared to 3.49 GEL in August 2015, representing annual Kh-Index deflation of 9.6%.

In June 2016, the average cost of cooking one standard Imeretian khachapuri increased to 3.12 GEL, which is 1.5% higher month-on-month (m/m, that is compared to May 2016), but 9.6% higher year-on-year (y/y, compared to June 2015).
It is worth noting that the entire monthly increase in the national Khachapuri Index was driven by Kutaisi (up by 9.2%). The Index continued to decline in Telavi and Tbilisi, and remained unchanged (albeit at a very high level in Batumi).
At 3.51 GEL (no change compared to last month), Batumi retained the title of the most expensive Georgian location at this time of the year. Certainly for khachapuri lovers. In Telavi, the Index lost a tiny 0.3%, reaching 2.99 GEL. A more pronounced decline of 2.4% was recorded in Tbilisi which, at 2.09 GEL, became the cheapest city. The most likely explanation for such a lackluster performance of the Index in Tbilisi is concerned with a seasonal weakness in demand. Indeed, the capital appears to be quite empty these days as many city dwellers left it for seaside vacations or quality time in the mountains.

In May 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.08 GEL, which is 2.7% lower compared to April 2016, but 7% higher compared to May 2015.

Come the summer season, tourism provides a major boost to the demand for Georgian products (and their prices). With the addition of international flights to Tbilisi, Kutaisi and Batumi, Georgia is currently attracting many more visitors from further away destinations, such as Iran and Israel. Still, the largest numbers of international arrivals originate in countries with which we have a land border: Russia, Turkey, Azerbaijan and Armenia.

Our Partners