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In October 2020, the Khachapuri Index continued its upward trend and reached 4.37 GEL. This figure is 2.9% higher than the previous month (September 2020) and 12.5% higher than October 2019 (YoY). Every ingredient contributed to the YoY Khachapuri Index inflation: cheese (19.0%), flour (16.3%), butter (12.4%), yeast (16.4%), milk (2.8%), and eggs (0.3%).
As the chart reveals, the price increases are particularly high for internationally traded commodities (butter and yeast) and those that use imported intermediate inputs in production (flour and milk).

The GEL continued to depreciate relative to the USD: with the average GEL/USD exchange rate in October 2020 being 3.22 (2.97 in October 2019). Thus, depreciation of the Georgian lari has placed notable upward pressure on the price of imported goods; with depreciation against the US dollar in excess of 8% in October 2020 compared to October 2019.

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In September 2020, the average cost of cooking one standard portion of Imeretian khachapuri was 4.09 GEL, which is 2.8% higher month-on-month (compared to August 2020), and 11.7% higher year-on-year (compared to the same month of the previous year, September 2019).

With the milk supply shortening for seasonal reasons, Khachapuri Index prices are on the rise in all Georgian cities. The biggest monthly increase (8.2%) was observed in Telavi, followed by Kutaisi (7.0%), and then Tbilisi (5.5%). The smallest monthly increase in price was observed in Batumi (2.6%).

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In June 2020, the average cost of cooking one standard portion of Imeretian khachapuri was 3.93 GEL. Compared to the previous year (June 2019), the Khachapuri Index gained 13%. While going up in yearly terms, the Index actually dropped by 4.2% compared to the previous month (May 2020).
Prices of all khachapuri ingredients except for flour decreased in June 2020 (compared to May 2020): cheese lost 6.2%, butter lost 1.1%, eggs lost 7.4%, yeast lost 2%, and milk lost 0.5%. However, the price of flour has gone up by 3.6%.

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The average cost of cooking one standard Imeretian Khachapuri in May 2020 stood at 4.18 GEL; 6.8% lower month-on-month compared to April. However, the Khachapuri Index did increase by 24.9% year-on-year (compared to May 2019). At this time of the year, the monthly downward trend in the Index is typically driven by a seasonal decline in cheese prices (due to the increased supply of fresh milk and a resulting lower demand for imported milk powder).

However, while such seasonal factors explain the MoM decline in the Index, they do not account for its YoY increase. Taking a more detailed look at prices, all ingredients contributed to the YoY inflation in May: cheese (+41.9%), butter (+15.5%), flour (+14.1%), eggs (+12.4%), yeast (+10.4%), and milk (+4.8%). As the chart reveals, the price increases are particularly high for internationally traded commodities (butter) and those that use imported intermediate inputs in production (flour and milk).

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