The FINANCIAL - Will The Downward Price Trend Continue?

Will The Downward Price Trend Continue?

Will The Downward Price Trend Continue?

The FINANCIAL -- In January 2018, the average price of cooking one Imeretian khachapuri stood at 3.71 GEL. Compared to the previous year (January 2017), the Khachapuri Index gained 1.3 %. While going up in yearly terms, the Index actually dropped 2.9% compared to the previous month (December 2017).

As shown in the chart, all khachapuri ingredients except butter contributed to the Khachapuri Index monthly deflation. The price of only one ingredient – butter - increased by 1.8% compared to previous month. All other khachapuri ingredients decreased in price: cheese (3.8%), flour (3.4%), egg (3.1%), yeast (1.2%) and milk (0.6%).

This decreasing price trend may continue for the next several months, because the fasting period is starting and the demand for milk and eggs will be lower. Furthermore, the supply of fresh milk will increase in spring, and this might push prices even further down. Last, GEL is gaining in value against USD, so imported goods (flour, butter, yeast) or imported intermediate inputs in their production (flour and milk) become cheaper when expressed in GEL.

 

Author: The FINANCIAL

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