In May 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.08 GEL, which is 2.7% lower compared to April 2016, but 7% higher compared to May 2015.
Come the summer season, tourism provides a major boost to the demand for Georgian products (and their prices). With the addition of international flights to Tbilisi, Kutaisi and Batumi, Georgia is currently attracting many more visitors from further away destinations, such as Iran and Israel. Still, the largest numbers of international arrivals originate in countries with which we have a land border: Russia, Turkey, Azerbaijan and Armenia.
In May 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.08 GEL, which is 2.7% lower month-on-month (m/m, that is compared to April 2016), but 7% higher year-on-year (y/y, compared to May 2015).
Due to seasonal factors, the Index declined m/m in all cities included in our survey (Tbilisi, Kutaisi and Telavi), except Batumi, Georgia’s Black Sea tourism hub. Instead of going down, the Batumi price of cheese – khachapuri’s main ingredient – almost doubled in May 2016, bringing the local Index well above the national average. In all previous years, we have observed Batumi prices shooting up a month or two later, in June-July, and staying at a high level through August and September. In this way, the Khachapuri Index mimicked the dynamics of seasonal tourism in Batumi and the nearby Adjara resorts.
In May 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.08 GEL, which is 2.7% lower month-on-month (that is compared to April 2016), but 7% higher year-on-year (compared to May 2015).
While the national Khachapuri Index is driven down by positive seasonal dynamics in the SUPPLY of Imeretian cheese, the local indices are quite susceptible to sharp variations in local DEMAND conditions. Thus, while Telavi, Tbilisi and Kutaisi see very little differences in the price of Imeretian cheese (ranging between 4.70 GEL/kg in Kutaisi to 5.73 GEL/kg in Tbilisi), Batumi currently stands out as Georgia’s priciest market due to an early start of the summer tourism season. In May, Imeretian cheese traded in Adjara at the exorbitant price of 8.00 GEL/kg (!) which we would normally observe only in the cold and milk-less winter months.
In May 2016, the average cost of cooking one standard Imeretian khachapuri declined to 3.08 GEL, which is 2.7% lower month-on-month (that is compared to April 2016), but 7% higher year-on-year (compared to May 2015).
The main khachapuri ingredient is Imeretian cheese, and, naturally, its price is the main driver of our Khachapuri Index. Over the years, we have been observing a sharp upward movement in the price of cheese from July till January (see graph), and an equally sharp downward movement from February till June. These seasonal price dynamics are closely tied to the annual production cycle of Georgia’s fledgling dairy industry. The prices of cheese, yoghurts any other products that are based on fresh milk are the exact mirror image of this cycle. They go up when there is little production (in fall and early winter), and down when there is plentiful supply (in spring and early summer).