cotton: Khadi institutes spared by market fluctuations | Varanasi News

Varanasi: As the textile industry grapples with soaring cotton prices, the special reserve fund set up by the Khadi and Village Industries Commission (KVIC) is saving all Khadi institutions across the country from rising prices.
The reserve fund has ensured that the country’s Khadi institutions are not affected by the price increase and the prices of Khadi cotton garments do not increase either. “The special reserve fund would save both Khadi institutions and Khadi buyers from any negative impact of rising prices,” KVIC Chairman Vinai Kumar Saxena told TOI.
Saxena said a political decision by the Khadi and Village Industries Commission (KVIC) in 2018, to set up a special reserve fund to deal with market fluctuations and other contingencies, came as a savior for all. Khadi institutions across the country, just as the entire textile industry is grappling with a sharp rise in raw cotton prices.
In 2018, KVIC decided to set up a Commodity Price Adjustment Account (PPA), a reserve fund for its five Central Ribbon Mills (CSPs), to deal with market-driven contingencies. These CSPs purchase cotton and process it into sliver and roving for supply to Khadi institutions, which process it into yarn and fabric. The PPA fund was created by transferring to it only 50 paise of each kilogram of the total ribbon/roving sold by these CSPs.
“Three years later, when the entire textile sector is facing the weight of shortage and a sharp rise in the price of raw cotton, KVIC has decided not to increase the cost of the ribbon / roving supplied to Khadi institutions by its sliver mills across the country despite cotton prices rising by more than 110%.Instead, KVIC will bear the excess cost of Rs 4.06 crore on the purchase of bales of raw cotton at the premium rates of the PPA Fund,” Saxena said.
The price of raw cotton has increased from Rs 36,000 per candy to Rs 78,000 per candy (each candy weighs 365 kg) over the past 16 months. This has had a direct impact on the production of cotton garments by major textile companies across the country, which have also cut production by 30-35% in recent months.
This decision by KVIC, which was taken for the first time to establish such a reserve fund, is a great relief to over 2,700 registered Khadi institutions and over 8,000 Khadi India outlets who are already struggling with production and marketing problems due to restrictions imposed during the covid19 pandemic. “In Varanasi division alone, there are 230 Khadi institutions and around 75,000 artisans are associated with them,” he said.
According to him, KVIC largely purchases cotton bales from Cotton Corporation of India (CCI) for its five CSPs located at Kuttur, Chitradurga, Sehore, Raebareli and Hajipur, which convert various varieties of cotton into sliver and roving. Cotton varieties purchased by KVIC are BB mod, Y-1/S-4, H-4/J-34, LRA/MECH, MCU_5 and DCH_32. The reported price difference these days is Rs 13,000 per candy to Rs 40,000 per candy of these varieties. The KVIC will need 6,370 bales of cotton of different varieties by March 31, which at the current rate will cost Rs 13.25 crore compared to Rs 9.20 crore at the old rates. The price difference of Rs 4.05 crore will be covered by the PPA reserve created by KVIC these days.
“CCI’s raw cotton shortage and consequent rise in the price of cotton has affected the entire textile industry, including Khadi. But KVIC has decided to continue supplying wicks/ribbons to Khadi institutions at the old rates to alleviate any financial burden on the institutions. This will also benefit millions of Khadi buyers as there will be no increase in the price of Khadi fabric. and clothes. It is KVIC’s commitment to every Khadi buyer to provide Khadi at affordable prices in line with the Prime Minister’s vision of ‘Khadi for the Nation’,” Saxena said.
Khadi holds a nearly 9% share in the textile industry and produces nearly 150 million square meters of fabric per year. With this decision, Khadi emerged as the only entity unaffected by rising cotton prices. So Khadi buyers and Khadi institutions have reason to rejoice.

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