June is the time of the year when the Khachapuri Index reaches the lowest point in its annual cycle. The supply of fresh milk a key input in the production of Imeretian cheese reaches its seasonal peak a few months earlier, in March and April. The prices of cheese, while declining in a continuous fashion from January onward, bottom out with a lag of two-three months, by June or July.

If we take a more detailed look at the prices of Kh-Index ingredients (see graph), the main contributors to y/y Khachapuri index deflation in March were cheese (-12%) and eggs (-1%). All other ingredients increased in price: flour (11%), yeast (21%), butter (6%), and milk (12%). As can be easily seen, prices fell y/y for locally-produced goods (eggs and cheese, made of fresh milk); prices went up y/y for goods that are imported (yeast and butter) or use imported intermediate inputs in their production (flour and milk).

On Friday, March 20th, in the conference hall of ISET, Jan Fidrmuc from Brunel University gave a presentation titled "How Persistent Is Social Capital?”. At the beginning of the presentation, he has defined Social Capital (SK) as one of the factors of production which encourages cooperation and helps to overcome free-riding.

In February, the average cost of cooking one standard Imeretian Khachapuri fell to 3.29GEL, which is 3.4% lower month-on-month (compared to January 2015), and 4.8% lower year-on-year (compared to February 2014).

Until 2012, Georgia has been encouraging foreigners to purchase land, bring modern technology and management to the country’s ailing agricultural sector. On the one hand, Georgia’s extremely liberal approach was a boon for investment by global food industry giants such as Ferrero (4,000ha hazelnut plantation in Samegrelo) and Hipps (growing of organic apple and production of aroma and apple concentrate in Shida Kartli).