The average cost of cooking one standard Imeretian khachapuri in April 2021 was 4.65 GEL. The Index gained 1% compared to the previous month (March 2021). Usually, at this time of year, seasonal declining trend is expected, which is largely driven by a springtime adjustment of the price of milk and milk products. However, the depreciation of the Georgian lari against the US dollar still has an upward pressure on the price of imported khachapuri ingredients. In April 2021, the GEL/USD exchange rate reached 3.43, 3% higher than in March 2021. As a result, the increased supply of milk could not outweigh the impact of the domestic currency’s depreciation and more expensive imports.

In annual terms (compared to April 2020), the Index increased by 6%. The reason behind this might well be the Easter Holiday. This year, Easter was celebrated in the first week of May in Georgia. There is typically greater demand for cheese and milk products during the week prior to Easter. Thus, this increased demand during the prior week directly affects the price of cheese, the main contributor to inflation in the Khachapuri Index.

Taking a more detailed look at prices, all ingredients contributed to the YoY inflation in April: cheese (+9.6%), butter (+13.7%), flour (+15.9%), eggs (+2.4%), yeast (+15.5%), and milk (+7.3%). As the chart reveals, the price increases are particularly high for internationally traded commodities (flour) and imported intermediate inputs (butter and milk).