ISET

In May 2017, the price of cooking one standard Imeretian khachapuri continued its normal seasonal decreasing trend and reached 3.14 GEL, which is 5.4% lower month-on-month (compared to April 2017), but 8.5% higher year-on-year (compared to May 2016). The main contributor to the price change was a seasonal decrease in the price of cheese, which fell by -10.1%, compared to the previous month (April 2017).

As shown on the graph, from July to December 2016, the price of cheese was lower compared to the previous year (2015). This trend was explained by the increasing trend of imported milk powder beginning in July 2016. However, this path has been reversed in the period January to May 2017, when the price of cheese is higher compared to same period last year.

In April 2017, the average cost of cooking one standard Imeretian khachapuri decreased to 3.32 GEL, which is 2.5% lower month-on-month (m/m, that is, compared to March 2017), but 4.9% higher year-on-year (y/y, compared to April 2016).

The monthly decline in the price of khachapuri is driven by the seasonal adjustment in the price of milk and cheese. The price of cheese (6.93 GEL) has declined by -5.2% compared to the previous month (March). The prices of other khachapuri ingredients were more stable and changes were very small.

ISET’s Khachapuri Index kept declining in April, which is in line with seasonal trends. The average cost of cooking one standard Imeretian khachapuri currently stands at 3.32 GEL, which is 2.5% lower month-on-month (compared to March 2017), and 4.9% above year-on-year (compared to April 2016).

The current underdeveloped structure of Georgian dairy sector makes milk prices high and noncompetitive. According to FAO-EBRD data, the farm gate prices of milk differ between commercial farms and smallholders, and the difference between the two prices is mostly stable throughout the year (except for the winter period when smallholders have almost no milk to sell).

In March 2017, the national average price of cooking Imeretian khachapuri declined to 3.41 GEL, which is 6.9% lower compared to the previous month (February 2017), and 4.1% above its value a year ago (March 2016).

Such a noticeable monthly decline in the price of khachapuri is driven by the seasonal adjustment in the price of cheese, which stood at 7.31 GEL in March 2017, and is 12.2% below last month’s value (February 2017). As mentioned in a previous publication, this year the price of milk started its seasonal decline in March. The Easter effect, more specifically Great Lent (which began on February 27th) might have strengthened the downward price trend, as demand on cheese and other milk products is lower during the Lent period.

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