In January 2021, the average price of cooking one Imeretian khachapuri stood at 4.84 GEL. Compared to the previous month (December 2020) the Khachapuri Index lost 3.5%. In annual terms (compared to January 2020), however, the index added 12.6%.

As shown in the chart, all khachapuri ingredients except eggs contributed to the yearly inflation of the Khachapuri Index. The price of only one ingredient – eggs – decreased by 1.9% compared to the previous year (January 2020). All other ingredients increased in price: flour (19.3%), cheese (18.3%), yeast (14.5%), butter (12.8%) and milk (7.2%).

In general, an increase at this time of year is driven by a seasonal shortage in the supply of fresh milk for which imported milk powder is substituted. This leads to corresponding increases in cheese and other milk products’ prices. This annual price increase is driven largely by the depreciation of the Georgian lari against the US dollar. Prices went up YoY for all imported goods, and for those that use imported intermediary inputs in production.

If we look at the more comprehensive basket of goods and services used for the official Consumer Price Index (CPI), Geostat’s food price inflation estimates are quite in line with our estimates: prices are up in annual terms by 6.4%.