The Khachapuri Index continued its upward trend in November 2019, with the average cost of cooking one standard Imeretian Khachapuri reaching 4.1 GEL. This is 6.1% higher month-on-month (compared to October 2019), and 12.6% higher year-on-year (compared to November 2018).

The increasing price trend was not surprising as, in general, an increase at this time of the year is driven by a seasonal decline in the supply of fresh milk and excess demand before the fasting period. This also leads to corresponding increases in cheese and other milk product prices. However, the yearly price increase is driven largely by the deprecation of the Georgian lari against the US dollar. Prices went up YoY for all locally produced goods (eggs and cheese), for imported goods (yeast and butter), and for those that use imported intermediary inputs in production (flour and milk powder).

As the graph highlights, the main contributors to YoY Khachapuri Index inflation in November were all the core khachapuri ingredients (compared to November 2018). The price of cheese grew by 18.6%, flour – 8.0 %, eggs – 3.4%, yeast – 2.5%, milk – 2.7%, and butter has gone up by 1.3%, leading to an overall increase in the Khachapuri Index.

Nevertheless, on November 28, the Nativity Fast started that will reduce the demand for milk and milk products, thus will put downward pressure on khachapuri prices.