[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]


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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.

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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