KVIC Reserve Fund saves Khadi institutions from raw cotton price hike

KVIC Reserve Fund saves Khadi institutions from raw cotton price hike

15 March 2022, Mumbai:

A special reserve fund set up in 2018 to deal with market fluctuations and other eventualities has saved Khadi institutions against the steep price hike of raw cotton, says the Khadi and Village Industries Commission.

Products Price Adjustment Account was set up by KVIC in 2018 for its five Central Sliver Plants (CSPs), to meet market-driven eventualities.

The PPA fund was created by transferring just 50 paise to it from each kilogram of the total sliver/roving sold by these CSPs.


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KVIC has decided not to increase the cost of sliver/roving being supplied to the Khadi institutions by its sliver plants across the country despite the cotton prices surging by over 110 percent.

Instead, KVIC will bear the excess cost of Rs 4.06 crore on procurement of raw cotton bales at the increased rates from the PPA fund, it added.

The price of raw cotton has increased from Rs 36,000 per candy to Rs 78,000 per candy in the last 16 months.

This has put a direct impact on the production of cotton apparel by major textile companies across the country, which have also reduced the production by 30-35 percent in recent months.


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