In February 2022, the cost of cooking one standard Imeretian khachapuri increased both annually and monthly, ranging between 5.7 GEL (Kutaisi) and 6.1 GEL (Tbilisi), with an average cost of 5.8 GEL. The latest average price is 28.8% higher than in February 2021. In month-to-month developments, the price of a khachapuri is 0.8% higher compared to the previous month January 2022.

Taking a more detailed look at prices, all the ingredients contributed to the YoY inflation in February: eggs (+38.9%), flour (+37.2%), butter (+25%), yeast (+13.4%), milk (+10.8%), and cheese (+22.4%).

In general, increases at this time of year are driven by a seasonal shortage in the supply of fresh milk for which imported milk powder, milk cream (e.g., butter), and other types of milk products are substituted. These products are mainly imported from Ukraine, Russia, and Belarus. Thus, given the current war in Ukrainian territory, a shortage of milk products is expected. The expected shortage might contribute to higher prices of cheese and other milk products. This might contribute to the YoY increase in milk products’ prices.

Furthermore, global oil prices are on the rise and have increased more than 30% since 24 February. Along with the increase in oil prices, international prices for oil products are also increasing. Fuel prices in Georgia are also affected by the exchange rate of the GEL against the USD. There has been a significant depreciation of the GEL in recent days. In particular, the exchange rate increased from 3.02 on February 24 to 3.32 on March 11.

International food prices are also on the rise. The FAO reports all-time high inflation. Prices were up this February: 20.7% above their February 2021 levels. The main contributors were the vegetable oil and dairy price sub-indices, followed by cereals and meat.