The new year started with a historic high for the Khachapuri Index. The Index continued its upward trend, reaching an average cost of 5.77 GEL in January 2022. This is 1.8% higher than December 2021 (MoM) and 23.7% higher compared to January 2021 (YoY). The highest price increase was observed for eggs (47%) and flour (31%). Furthermore, as the chart highlights, the year-on-year price of khachapuri ingredients – butter (23%), cheese (16%), yeast (15%), and milk (10%) – each rose in comparison to January 2021.

The greatest contributor to the annual price rise appears to be increased costs on international markets; with the FAO reporting growing prices over the last year. Each of the product categories contributed to this inflation: cereals, vegetable oils, dairy, meat, and sugar. International food price movements are thus transmitted to domestic markets, which were already affected by local food prices in previous months. If these trends persevere, we might expect even higher prices in the upcoming months.

Recent Khachapuri Index dynamics are in line with GeoStat’s reported food category prices. GeoStat shows that prices in the food subgroup grew by 16.2% YoY. Such a notable rise in this subgroup is partly responsible for the overall increase in vegetables (23.3% YoY), followed by bread and cereals (20.5%); oils and fats (19.6%); mineral waters, soft drinks, fruit, and vegetable juices (18.3%); sugar, jam, honey, chocolate, and confectionery (18.2%); fish (16.6%); milk, cheese, and eggs (14.4%); fruit and grapes (13.7%); and meat (11.9% YoY).