12.Jul .2022 18:00

Khachapuri Index Increases By 28% - ISET

Khachapuri Index Increases By 28% - ISET
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The average cost of cooking one standard portion of Imeretian Khachapuri stood at 5.39 GEL in June 2022. This is 2.7% lower MoM (compared to May 2022) and 28.1% higher YoY (compared to June 2021), - according to the International School of Economics (ISET).

In comparison to June 2021, the prices of all khachapuri ingredients are up in yearly terms. Taking a more detailed look at these prices (see the graph above), cheese (+27.8%) was the main contributor to the YoY Khachapuri Index inflation in June – cheese price retains the highest weight in the index. While the cheese price was the main driver behind the heightened Khachapuri Index, the greatest individual increase can be observed in the price of flour, which is up by 46.1%. The prices of all other ingredients also rose – eggs (+38.9%), butter (+22.7%), milk (13.9%), and yeast (13.0%).

Several factors have contributed to these rising food prices. The ongoing war in Ukraine and various difficulties in supply chains have led to food shortages. Furthermore, the price of both fertilizers and energy costs are on the rise, which translates into higher local prices.

In addition, international food prices have contributed to food price inflation in Georgia. Despite the decline in food prices over the past three months, the FAO reported yearly inflation of 23.1% in June 2022, compared to the same period last year. According to the FAO, prices have declined in the following food categories: vegetable oils, cereals, and sugar, although dairy and meat prices have risen. Lower international prices are typically transmitted to local markets slowly, however, if the declining trend is preserved and international prices do stabilize, the pressure on food prices in Georgia might soon relax.