Economy

The borscht index again recorded an increase in the price of most of its components

uAH 185 will be needed in March to properly cook a traditional Ukrainian dish, borsch. This is 15 UAH more expensive than last month. This is evidenced by the Borsch Index, which is calculated monthly by the Ukrainian Agribusiness Club, Komersant ukrainskyi reports.

In determining the Index, experts assumed that to make borsch (for 3 liters of water) you will need: 300 g of cabbage, 200 g of beets, 300 g of potatoes, 150 g of carrots, 100 g of onions, 2 tablespoons of tomato paste, 30 ml of vegetable oil, 500 g of pork ribs, and salt, pepper and bay leaf to taste.

How prices for borscht ingredients have changed

If we look at the cost of borsch products, we see that

– cabbage went up by 71% over the year, and fell in price by 1% over the month;

– beets rose in price by 51% over the year and by 13% over the month;

– potatoes rose in price by 26% over the year, but fell in price by 2% over the month;

– carrots added 271% over the year and 9.8% over the month;

– onions fell in price by 1% over the year, but rose by 5% over the month;

– tomato paste went up by 14% over the year and by 6% over the month;

– vegetable oil increased in price by 38% over the year and by 4% over the month;

– pork ribs went up by 7% over the year and by 10% over the month.

If you add two slices of loaf (50 g), a tablespoon of sour cream (25 g), and a clove of garlic (5 g) to borsch, the total price of the dish will rise to 185 UAH, up from 170 UAH last month.

Thus, the Borsch Index allows us to estimate changes in prices for basic food products. It is a kind of conditional indicator of the cost of a grocery basket in supermarkets. The cost of a pot of borsch can be used to track how prices for basic foods are changing in the country. The Borsch Index is calculated by analogy with the international Big Mac index.

What does the “fresh” Big Mac index indicate?

In January 2025, the Ukrainian hryvnia ranked sixth in the global ranking of undervalued currencies. This is evidenced by the updated Big Mac index from The Economist for January 2025.

The Big Mac Index showed that the national currency of Ukraine should be traded at UAH 20.73 per dollar, which indicates an undervaluation of 50.7% compared to the current market rate of UAH 42.0 per dollar. This conclusion is based on a comparison of the cost of a Big Mac in Ukraine (UAH 120) and the United States ($5.79).

Ukraine is ahead of the rest of the world in this ranking: Taiwan with an undervaluation index of 58.8%, Indonesia – 56.2%, India – 54.8%, Egypt – 53.6%, and South Africa – 52.0%.

What is the Big Mac Index?

The Big Mac Index was invented by The Economist in 1986 as a light-hearted guide to whether currencies are at their “right” level. This is how it is explained in the publication itself.

The Big Mac index is based on the theory of purchasing power parity and the idea that in the long run exchange rates should move toward the rate that would equalize the prices of an identical basket of goods and services (in this case, a hamburger) in any two countries. The composition of this burger contains the main categories of products, which allows to reflect the real state of the economy and the price correlation in different countries.

In fact, the Big Mac Index is an informal indicator of currency valuation. The Economist emphasizes that burgeronomics was never intended to be an accurate measure of currency differences, but only a tool to make exchange rate theory more receptive. And yet, as the publication recognizes, the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of scientific studies.