While gradually increasing since June, in line with its seasonal trend (driven by a gradual decline in the production of fresh milk), the Khachapuri Index remains almost 10% below its level exactly one year ago. Constructed as a weighted average of the prices of various khachapuri ingredients, the Index is particularly sensitive to changes in the price of Imeretian cheese, its most expensive ingredient. The recent spell of annual deflation in the Khachapuri Index is thus a reflection of a peculiar sagging in the price of cheese (see table).

The economic significance of bees extends far beyond honey production. As the National Resource Defense Council writes in 2011 (“Why We Need Bees: Nature’s Tiny Workers Put Food on Our Tables”), the value of the honey that bees produced in the US in that year amounted to 150 million dollars, while the value of the harvested crops that were pollinated by bees was 15 billion dollars, i.e., greater by a factor of 100! Having bees around is not primarily beneficial for the beekeepers, but even more for anyone else who grows crops, fruits, or vegetables.

On the back of a sharp y/y decline in the price of Imeretian cheese (down by about 10 and 18% in July and August 2016, respectively), the Khachapuri Index took a big hit in August 2016. Having reached the seasonal bottom in May, the Index increased in June due to regular seasonal factors (tourism-related increase in demand and a gradual slowdown in domestic milk production). Yet, its behavior in July and August represents a major departure from the multi-year pattern we have been observing since 2008.

On Tuesday, May 24, Dr. David Ubilava from the University of Sidney gave a presentation entitled "The El Niño Southern Oscillation and Economic Growth”. Dr. Ubilava started the presentation with the definitions of such phenomena such as climate anomalies and weather and emphasized the importance of weather as a factor in agricultural production.

Spring brings happiness in peoples’ lives not only because of the brighter days but also because of the increased supply of many seasonal products. This is reflected in the production cost of Khachapuri. In April 2016, the national average cost of preparing one standard Imeretian khachapuri went down to 3.16 GEL, 3.2% lower compared to March 2016 (but 6.9% higher compared to April 2015).