The average cost of cooking one standard Imeretian Khachapuri in November 2016 stood at 3.46 GEL, which is 1.9% higher month-on-month (compared to October 2016). The Khachapuri Index is down by 5.6% year-on-year (compared to November 2015), suggesting annual deflation as measured by the index.

Khachapuri’s main ingredient is Imeretian cheese, and naturally, its price is the main driver of our Khachapuri Index. In November 2016, cheese was the main contributor to the year-on-year decrease in Khachapuri prices; cheese prices dropped by 6.5% compared to the same month of the last year.

The GEL’s continuing depreciation relative to the USD (in November 2016, the GEL/USD exchange rate stood at 2.48, which is 0.16 points above its rate in October 2016) could have increased wheat flour prices, as Georgia is highly dependent on wheat imports. However, the exchange rate effect is balanced by the fact that international wheat prices are reflecting a decreasing trend. In October 2016, wheat prices declined by 0.55 % month-on-month (compared to September 2016).

Results from the Khachapuri Index data show that flour prices are in line with the international wheat price trend. According to our data, in November 2016 the price of flour has declined by 1.7% month-on-month (compared to October 2016), and by 7.0 % year-on-year (compared to November 2015). It is important to note that we only observe the prices of high-quality wheat flour in four cities in Georgia.

The same trend has been observed in the ISET’s Retail Food Price Index. According to that index, in November 2016, the price of flour is down by 3% month-on-month (compared to October 2016).