December 15, 2015 FPI | Food Prices Going Up Before the New Year
15 December 2015

Retail food prices, as measured by ISET-PI’s FPI, increased by 0.4% in early December compared to mid-November. Prices are also up 2.2% year-on-year (y-o-y, that is compared to December 2014). The largest increases were registered for eggplants (up 76%), cucumbers (52.1%), and greens (16.2%).

While most fruits and vegetables grow in price at this time of the year, tangerines continue to lose in value and are currently 57.5% cheaper than in November. Perhaps surprisingly, cheese, which is usually more expensive in winter, lost 8.5% in price (this may be caused by the pre-Christmas fast-related slump in demand); the price of garlic is also down by 7.7%.

Georgia is beginning to benefit from the arrival of Russia-sanctioned Turkish tomatoes?

Georgia saw moderate annual price increases (December-to-December) in four out of five food categories comprising the Retail FPI: (i) grocery, (ii) fruits and vegetables, (iii) milk products, (iv) meat, and (v) non-alcoholic drinks. While milk, meat, grocery products, and non-alcoholic beverages (including cola, tea, and coffee) gained 0.2%, 4.5%, 7.4%, and 9.6%, respectively, fruits and vegetables are down by a whopping 25%!

Such a big drop in fruit and vegetable prices requires a proper explanation. One possibility is that Georgian retailers are now better equipped to source fresh products from Georgian agricultural producers (particularly from recently-invested modern greenhouses). Another – yet to be tested – is that Georgia is beginning to benefit from the arrival of Russia-sanctioned Turkish tomatoes, cucumbers, and greens, as discussed in “Russo-Turkish Drama: a Christmas Gift for the Georgian Economy?