Kanchipuram Saree See 50% Price Hike Due to Soaring Gold Costs

New Delhi. The soaring prices of gold have cast a shadow over the traditional splendour of Kancheepuram silk saris, leaving both buyers and sellers grappling with the financial strain during the wedding season.

Price Surge and Consumer Shift

Over the past eight months, the cost of Kancheepuram silk saris has skyrocketed by up to 50%, making these exquisite garments a luxury beyond the reach of many price-conscious consumers. This surge is directly attributed to the unprecedented rise in gold prices, a vital component of these iconic saris.

As a result, consumers are making pragmatic choices, opting for saris with less gold and silver content or even those without these precious metals altogether. This shift in consumer behaviour is evident in the reduced demand for traditional Kancheepuram silk saris with high gold and silver content.

Impact on Retailers

Leading retail textile chain RmKV, renowned for its Kancheepuram silk saris, has experienced a noticeable 20% decline in sales during the current wedding season. Managing Director K Sivakumar highlighted how customers are adjusting their preferences based on budget constraints, opting for saris with minimal gold and silver elements or reducing the number of saris purchased.

The dramatic surge in gold prices, with rates climbing from Rs 5,356 per gram in October 2023 to Rs 6,900 per gram by May 2024, has had a cascading impact on the silk sari industry. Silver rates followed a similar trajectory, further exacerbating the situation for silk sari manufacturers and retailers.

Challenges for Premium Segment

The escalation in sari prices, particularly in the premium segment, has posed challenges for weavers and retailers. J Kamalanathan of K S Parthasarathy Handloom Weavers Association highlighted the stagnation in premium sari production due to dwindling demand and escalating costs, leading weavers to pivot towards more affordable offerings to sustain their businesses.

Industry Struggles and Adaptation

V K Dhamodaran of the Kancheepuram Silk Sari Manufacturers Association lamented the industry's challenges, citing a 40-50% increase in sari prices within the specified timeframe. The essential role of gold and silver in crafting the intricate 'zari' work of traditional silk saris underscores the industry's vulnerability to fluctuations in precious metal prices.

In response to shifting consumer preferences and affordability concerns, customers are gravitating towards handloom Kancheepuram silk saris featuring 'zari' without the traditional gold and silver mix. This trend, while addressing budget constraints, has also significantly impacted business dynamics and weavers' livelihoods.