[Federal Register Volume 59, Number 87 (Friday, May 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10989]
[[Page Unknown]]
[Federal Register: May 6, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[A-614-801]
Fresh Kiwifruit From New Zealand; Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration/International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
-----------------------------------------------------------------------
SUMMARY: In response to a request by the respondent, the New Zealand
Kiwifruit Marketing Board, the Department of Commerce has conducted an
administrative review of the antidumping duty order on fresh kiwifruit
from New Zealand. The review covers one exporter and the period
November 27, 1991, through May 31, 1993. The review indicates the
existence of margins for the exporter.
As a result of this review, we preliminarily determine to assess
antidumping duties equal to the difference between the United States
price and foreign market value.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: May 6, 1994.
FOR FURTHER INFORMATION CONTACT: Amer M. Kayani or Thomas F. Futtner,
Office of Antidumping Compliance, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-5346
or 482-3814, respectively.
Background
On June 2, 1992, the Department of Commerce (the Department)
published the antidumping duty order on fresh kiwifruit from New
Zealand (57 FR 23203). The Department published a notice of
``Opportunity to Request Administrative Review'' on June 7, 1993 (58 FR
31941). The respondent, the New Zealand Kiwifruit Marketing Board
(NZKMB), requested that we conduct an administrative review for the
period November 27, 1991, through May 31, 1993. We published a notice
of ``Initiation of Antidumping and Countervailing Duty Administrative
Review'' on July 21, 1993 (58 FR 39007), announcing an administrative
review of the NZKMB. The Department has now conducted this
administrative review in accordance with section 751 of the Tariff Act
of 1930, as amended (the Tariff Act).
Scope of the Review
The product covered by this review is fresh kiwifruit. Processed
kiwifruit, including fruit jams, jellies, pastes, purees, mineral
waters, or juices made from or containing kiwifruit, are not covered
under the scope of this review. The subject merchandise is currently
classifiable under subheading 0810.90.20.60 of the Harmonized Tariff
Schedule (HTS). Although the HTS number is provided for convenience and
customs purposes, our written description of the scope of this review
is dispositive.
United States Price
Exporter's Sales Price: As provided in section 772(c) of the Tariff
Act, we used the exporter's sales price (ESP) as U.S. price for certain
sales by the NZKMB to the United States; these sales were made to the
first unrelated party in the United States after importation, and hence
warranted ESP methodology.
We calculated ESP based on packed F.O.B. (ex-New Zealand
coolstore), and packed F.O.B., freight-prepaid prices. We made
deductions, where appropriate, for New Zealand inland freight
(coolstore to port), loading charges in New Zealand, ocean freight,
basic marine insurance, charter insurance, U.S. import duties, U.S.
brokerage and handling, U.S. inland freight (decreased to account for
prepaid freight where applicable), and price discounts (i.e.,
advertising allowances, special advertising allowances, market
adjustment discounts, advertising rebates which actually constituted
discounts, and discounts for quality problems). In accordance with
sections 772(e) (1) and (2) of the Tariff Act, we made additional
deductions, where appropriate, for agent commissions, broker
commissions, credit, direct advertising, and indirect selling expenses.
Indirect selling expenses included inventory carrying costs, repacking,
U.S. primary and U.S. satellite coolstore charges, New Zealand and U.S.
instore insurance, fire insurance, product liability and tamper
insurance, earthquake insurance, indirect advertising, quality control
expenses, miscellaneous selling-agent-related charges, U.S.-incurred
indirect expenses, and New Zealand incurred indirect selling expenses
associated with selling in the United States. We increased the U.S.
price to account for post sale price adjustments not reflected in the
gross price.
Purchase Price: As provided in section 772(b) of the Tariff Act, we
used purchase price to represent the U.S. price for sales made on a CIF
basis directly by the NZKMB. Deductions were made, where appropriate,
for ocean freight, foreign inland freight, and inland/marine insurance
in accordance with section 772(d)(2) of the Tariff Act.
Foreign Market Value
The Department determined that home market sales did not constitute
a viable basis for calculating foreign market value (FMV). Therefore,
in accordance with 19 CFR 353.48 and 353.49(b), the Department chose
sales to Japan as the basis of FMV. Japan is the largest third-country
market based on information submitted by the NZKMB. Neither the
petitioner nor the respondent raised in this review any other factor
relevant to third country selection, hence we did not consider any
other factor in determining the third-country market.
In general, the Department relies on monthly weighted-average
prices in the calculation of FMV. In consideration of the significant
volume of third-country sales involved in this review, we decided to
test respondents' third-country sales to determine whether we could use
annual FMVs as a basis of comparison to U.S. sales. To determine
whether a period of review (POR) weighted-average price was
representative of the transactions under consideration, we performed a
three-step test. See Antifriction Bearings from Japan, et al.; Final
Results of Review, 58 FR 42289 (1993).
We first compared the monthly weighted-average third-country price
for each model with the weighted-average POR price of that model. We
calculated the proportion of each model's sales whose POR weighted-
average price did not vary more than plus or minus 10 percent from the
monthly weighted-average prices. We did this test for each model of
kiwifruit. We then compared the volume of sales of all models of
kiwifruit whose POR weighted-average price did not vary more than plus
or minus 10 percent from the monthly weighted-average price with the
total volume of sales of kiwifruit. If the POR weighted-average price
of at least 90 percent of sales of kiwifruit did not vary more than
plus or minus 10 percent from the monthly weighted-average price, we
considered the POR weighted-average price to be representative of the
transactions under consideration. Finally, we tested whether there was
any correlation between fluctuations in price and time for each model.
We found that no significant correlation existed between price and time
(See analysis memorandum to the file, 4/25/94). That is, prices did not
consistently rise or fall so as to make annual weighted-average prices
unrepresentative of home market prices.
Because many of the NZKMB's sales were determined to be at prices
below the cost of production (COP) during the investigation, the
Department initiated a COP investigation for the purposes of this
administrative review. Just as the Department found in the
investigation, we find that in comparing third-country sales to COP,
the reseller/exporter's acquisition prices are irrelevant because
section 773(b) of the Tariff Act requires that the Department look at
the actual COP of the subject merchandise. Thus, we used the cost
incurred by kiwifruit farmers, the actual producers of the subject
merchandise, to calculate the COP benchmark.
Due to the large number of growers from which the NZKMB purchased
kiwifruit during the POR, the Department determined that sampling was
both administratively necessary and methodologically appropriate to
calculate a representative cost of producing the subject merchandise
for purposes of this administrative review (See section 777A of the
Tariff Act). Based on comments submitted by the petitioner and the
respondent, we decided to select kiwifruit growers on a stratified
basis across the categories of regional location. Farms were stratified
by geographic regions into either the Bay of Plenty region or non-Bay
of Plenty regions. This division was made because 70 percent of the New
Zealand kiwifruit is produced in the Bay of Plenty region and it is
considered to be the most cost-effective area in which to grow
kiwifruit. Once farms were categorized into two geographic regions, a
random sample of 20 growers was selected. Since 70 percent of the New
Zealand kiwifruit production originates in the Bay of Plenty region, we
selected 14 growers representing this region. An additional six growers
were selected from the non-Bay of Plenty regions.
We sent COP questionnaires through the NZKMB to the 20 kiwifruit
growers, all of which responded to the Department's questionnaire.
These 20 responses, along with supplemental responses and verification
results, were analyzed and relied upon, where appropriate, in reaching
the preliminary results of the review.
We calculated the cost of cultivation for each grower by summing
all costs for the 1992 kiwifruit season. These costs included the cost
of materials, farm labor, farm overhead, and packing. We allocated the
cost on a per tray-equivalent basis over the total number of tray-
equivalents submitted by each grower to the NZKMB. We then adjusted
those costs to reflect the fruit loss of 22 percent, which was
disclosed by the NZKMB in its financial statement. We added the NZKMB's
general and administrative expenses to the farm's average cost per
tray.
The orchard set-up costs for all growers were amortized over 20
years (See memorandum to Holly A. Kuga, 4/21/94). Because several
growers failed to provide actual orchard set-up costs, we must base our
determination on the ``best information available'' (BIA), pursuant to
19 CFR 353.37(a). For those growers that did not or could not provide
actual set-up costs, we used grower number 17's average cost per
hectare, collected at verification, as BIA to calculate set-up costs.
These are the highest orchard set-up costs of the 20 growers in our
sample.
For growers that allocated costs over the productive area, that is,
canopy area, we made adjustments to include the headlands and sidelands
in the productive area of the kiwifruit orchard for the purpose of
allocating costs.
We made adjustments to growers' cost for depreciation, interest,
labor, repairs, management, vehicles, fertilizer, spraying, rates
(property tax), electricity, shelter, water, general and
administrative, pruning, and mowing on a farm-specific basis where
appropriate.
For the grower that failed verification, we used BIA to determine
its COP, pursuant to 19 CFR 353.37(a). This BIA was based on the
highest COP we calculated for all responding growers.
We calculated a simple average COP from the sampled growers'
individual COPs. The total COP was calculated on a New Zealand dollar
per single-layer tray equivalent basis (NZ$/SLT).
Pursuant to Department practice, in conducting our COP analysis, if
over 90 percent of a respondent's sales of a particular model were at
prices above the COP, we did not disregard any below-cost sales of that
model because we determined that the respondent's below-cost sales were
not made in substantial quantities, as required under section 773(b) of
the Tariff Act. See Certain Carbon Steel Butt-Weld Pipe Fittings from
Thailand; Final Determination of Sales at Less Than Fair Value, 57 FR
21065 (1992). If between 10 and 90 percent of a respondent's sales of a
particular model were at prices above the COP, we retained the sales
above cost for analysis, and we examined the sales below cost to
determine whether they occurred over an extended period of time.
Consistent with the Departments' practice, the Department disregarded
those sales made below cost if occurring in more than two months. Where
we found that more than 90 percent of respondent's sales of a model
were at prices below the COP and over an extended period of time, we
disregarded all home market sales of that model and based FMV on
constructed value (CV) in accordance with section 773(b) of the Tariff
Act. There is no information on the record demonstrating that prices of
below cost sales would recover all costs within a reasonable period of
time.
To calculate CV, the statutory minimum profit of eight percent was
added because the NZKMB's actual profit was less than the statutory
minimum (See section 773(e) of the Tariff Act). We added selling,
general and administrative expenses for the NZKMB to the farm's average
cost per tray because the actual expenses were higher than the
statutory minimum of 10 percent.
We adjusted third-country prices, where appropriate, to reflect
deductions for rebates, New Zealand inland freight, New Zealand inland
freight insurance, New Zealand port loading expenses, ocean freight and
charter insurance. Direct advertising, imputed credit, and letter of
credit charges were also deducted. We also deducted indirect selling
expenses including inventory carrying costs, New Zealand instore and
fire insurance, product liability and tamper insurance, indirect
advertising, and other indirect selling expenses when calculating FMV
for comparison to ESP transactions. This deduction for third country
indirect selling expenses was capped by the amount represented by U.S.
indirect selling expenses plus U.S. commissions, in accordance with 19
CFR 353.56(b).
Preliminary Results of Review
We have preliminarily determined that the following margin exists
for the period November 27, 1991, through May 31, 1993:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
New Zealand Kiwifruit Marketing Board........................ 35.86
------------------------------------------------------------------------
Interested parties may request disclosure within five days of the
date of publication of this notice, and a hearing within 10 days of the
date of publication. Any hearing requested will be held as early as
convenient for parties but not later than 44 days after the date of
publication, or the first workday thereafter. Case briefs, or other
written comments, from interested parties may be submitted not later
than 30 days after the date of publication of this notice. Rebuttal
briefs and rebuttal comments, limited to issues raised in the case
briefs, may be filed no later than 37 days after the date of
publication. The Department will publish the final results of review,
including its results of its analysis of issues raised in any such
written comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between U.S. price and FMV may vary from the percentage
stated above. Upon completion of this review, the Department will issue
appraisement instructions concerning the respondent directly to the
U.S. Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise, entered, or withdrawn
from warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided for by section
751(a)(1) of the Tariff Act: (1) The cash deposit rate for the reviewed
firm will be that firm's rate established in the final results of this
administrative review; and (2) the cash deposit rate for merchandise
exported by all other manufacturers and exporters who are not covered
by this or any previous administrative review conducted by the
Department will be the ``all others'' rate of 98.60 percent established
in the LTFV investigation.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: April 29, 1994.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 94-10989 Filed 5-5-94; 8:45 am]
BILLING CODE 3510-DS-P
