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The cost of cooking one standard portion of Khachapuri stood at 3.61GEL in January 2016. Compared to the previous month (December 2015) the Index lost 4.3%; in annual terms (compared to January 2015), it actually gained 6%.
Considering average prices, Telavi – the smallest city in our sample – is currently one of the most expensive markets for khachapuri ingredients. Yet, it also offers the greatest bargains for those frugal housewives among us who care to look for the cheapest ingredients. A frugal housewife would pay only 3.12GEL for one portion of Khachapuri in Telavi, saving a solid 14.3% of the local average price. Tbilisi and Kutaisi are somewhat less friendly for frugal housewives, offerings savings of 13.5 % and 9.9%, respectively. There are even fewer bargains in Batumi. If one spends time to search for the cheapest ingredients, she could save only about 8.4% of the local average, paying 3.24GEL for one portion of khachapuri.
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With the New Year festivities finally behind us, ISET’s Khachapuri Index started on its seasonal downhill trajectory. In January, the Index slid 4.3% m/m, reaching 3.61 GEL per one standard portion of the Imeretian khachapuri. At the same time, it is some 6% higher y/y (compared to January 2015).
Interestingly, the Index currently takes nearly identical values all over Georgia, adhering to the “Law of One Price”. According to this economics concept, similar goods should be sold at roughly the same price in all locations in a country (assuming no artificial trade barriers and low transportation costs). The idea behind this law is very simple: if prices were to significantly diverge, shrewd traders would use this “arbitrage” opportunity to profit. They would buy low and sell high until prices converge.
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The average cost of cooking one standard portion of Imeretian Khachapuri stood at 3.61 GEL in January 2016. This is 4.3% lower m/m (compared to December 2015), and 6% higher y/y (compared to the same month of previous year, January 2015).Thus, annual inflation, as measured by ISET’s Khachapuri index, is roughly in line with the official estimate of 6%, based on GeoStat’s Consumer Price Index (CPI).
The prices of all khachapuri ingredients, except flour, are up in annual terms (see chart), that is compared to January 2015. Understandably, prices of milk, cheese and most other products are under pressure given the massive devaluation of the Georgian lari over the course of 2015 on the one hand, and the country’s reliance on imported food products and ingredients, such as milk powder, on the other.
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The New Year is approaching, and Georgian housewives are already preparing for this great event. So does the ISET-Policy Institute. The special dish we have cooked for our readers is a New Year Supra Index. Served on the Georgian Supra Map, the Index shows the cost (in GEL) of a standard supra meal for a family of 5-6 persons in each one of Georgia’s regions. Included in our calculations are such traditional dishes as khachapuri, mtsvadi, satsivi, trout, fried chicken, Olivier salad, pkhali, cucumber & tomato salad, and – for desert – gozinaki and fruits.
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