Food prices in Cyprus are increasing at a higher rate than the overall inflation, putting additional strain on household purchasing power, according to a report by Trojan Economics. The firm highlights that while general inflation rates are commonly discussed, the cost of basic goods, particularly food and non-alcoholic beverages, paints a clearer picture of the financial pressures felt by consumers. Food prices have risen faster than the general price index in early 2026, reversing a period when the gap had narrowed.

The report emphasizes that food demand is relatively inelastic, meaning households cannot easily reduce consumption despite rising prices, forcing many to cut spending in other areas. This effect is particularly severe for lower-income families, who allocate a larger share of their budgets to essentials. Trojan Economics notes several factors influencing food prices, including rising global agricultural costs, energy and transport expenses, weather conditions, and geopolitical disruptions, compounded by Cyprus’ dependency on imports.

Market structure also plays an important role, with competition, market concentration, and bargaining power affecting how cost increases translate into retail prices. The firm stresses the need for systematic market monitoring and understanding of price formation to protect consumers. While competition cannot eliminate external cost pressures, it can help ensure consumers get the best possible prices under prevailing conditions.