Initiation of Antidumping Duty Investigation: Honey From the People's Republic of China

DEPARTMENT OF COMMERCE

[A-570-838]

Initiation of Antidumping Duty Investigation: Honey From the

People's Republic of China

agency: Import Administration, International Trade Administration,

Department of Commerce.

effective date: October 31, 1994.

for further information contact: David J. Goldberger or Louis Apple,

Office of Antidumping Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW., Washington, DC, 20230; telephone

(202) 482-4136 or (202) 482-1769, respectively.

Initiation of Investigation

The Petition

On October 3, 1994, we received a petition filed in proper form by

members of the American Beekeeping Federation and the American Honey

Producers Association. In accordance with 19 CFR 353.12, petitioners

allege that honey from the People's Republic of China (PRC) is being,

or is likely to be, sold in the United States at less than fair value

within the meaning of section 731 of the Tariff Act of 1930, as amended

(the Act), and that these imports materially injure, or threaten

material injury to, a United States industry.

Petitioners have stated that they have standing to file the

petition because they are interested parties, as defined under section

771(9)(C) of the Act, and because the petition is filed on behalf of a

significant portion of the U.S. industry producing the product subject

to this investigation. If any interested party, as described under

paragraphs (C), (D), (E), or (F) of section 771(9) of the Act, wishes

to register support for, or opposition to this petition, it should file

a written notification with the Assistant Secretary for Import

Administration.

Scope of Investigation

The products covered by this investigation are natural honey,

artificial honey containing more than 50 percent natural honey by

weight, and preparations of natural honey containing more than 50

percent natural honey by weight. The subject products include all

grades and colors of honey whether in liquid, creamed, comb, cut comb,

or chunk form, and whether packaged for retail or in bulk form.

The subject merchandise is currently classifiable under subheadings

0409.00.00, 1702.90.50, 2106.90.60, 2106.90.61, 2106.90.65, and

2106.90.69 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, our written description of the scope of this

proceeding is dispositive.

United States Price and Foreign Market Value

United States Price

Petitioners based United States price (USP) on contract prices from

a U.S. importer of the subject merchandise from the PRC. In calculating

USP, petitioners deducted amounts for the following: U.S. duties, ocean

freight, marine insurance, U.S. harbor maintenance fee, U.S.

merchandise processing fee, and the Honey Board fee (a U.S. Department

of Agriculture assessment on honey or honey used in honey products in

the United States).

Foreign Market Value

A. Non-Market Economy Determination

Petitioners contend that the PRC is a non-market economy (NME)

country within the meaning of section 771(18)(A) of the Act. The

Department has determined in previous investigations that the PRC is an

NME, and the presumption of NME status continues for purposes of

initiation of this investigation. See e.g., Final Determination of

Sales at Less than Fair Value: Certain Paper Clips from the PRC, 59 FR

51168 (October 7, 1994) (Paper Clips).

In accordance with section 773(c) of the Act, foreign market value

in NME cases is based on NME producers' factors of production, valued

in a market economy country. Consistent with Department practice (see

Initiation of Antidumping Duty Investigation: Glycine from the PRC, 59

FR 38435, July 28, 1994), absent evidence that the PRC government

determines which of its beekeepers/processors shall produce for export

to the United States, we intend, for purposes of this investigation, to

base FMV only on those beekeepers/processors that produced honey sold

to the United States during the period of investigation (POI).

In the course of this investigation, parties will have the

opportunity to address this NME determination and provide relevant

information and argument related to the issues of the PRC's NME status

and granting of separates rates to individual exporters.

B. FMV Calculations

Petitioners calculated FMV on the basis of the valuation of factors

of production derived from information developed by a market researcher

in India about production processes in India, which petitioners claim

are similar to the PRC. Petitioners valued these factors, where

possible, based on publicly available published information from India

(see foreign market research report submitted by petitioners on October

14, 1994, at Exhibit 1). Petitioners argue that India is a country at a

comparable level of economic development to the PRC and India is a

significant producer of comparable merchandise, thus meeting the

requirements of section 773(c)(4) of the Act. For purposes of this

initiation, we have accepted India as an appropriate surrogate country

selection.

Where Indian values were not available, petitioners valued the

factors of production using the U.S. industry's costs, where

petitioners determined that this provided a reasonable basis upon which

to value such factors.

Petitioners provided FMV calculations based on data associated with

two species of bee known to produce honey in the PRC, i.e., the low-

yield A. cerana (eastern) honeybee and the high-yield A. mellifera

(western) honeybee. Petitioners have provided public information which

indicates that each species accounts for approximately one-half of the

commercial honey-producing colonies in the PRC (see October 14, 1994,

submission of petitioners, at p. 8). In accordance with 19 CFR

353.52(a)(2), petitioners' FMV for the two species consisted of the sum

of beekeeping costs, processing costs, profit, and packing, and the

factors were valued as follows:

For variable and fixed costs associated with beekeeping

operations, as well as processing costs, petitioners used Indian

factors of production based on their foreign market research.

For labor costs associated with beekeeping operations,

petitioners relied on Indian factors based on their foreign market

research. Petitioner valued labor costs on the basis of publicly

available Indian agricultural wage rates.

Petitioners added amounts for transportation and land-

lease costs associated with high-yield western honeybee beekeeping

operations, and valued these based on a U.S. producer's cost-per-pound.

For profit, petitioners used the profit margins for

beekeeping operations contained in their foreign market research, and

the statutory minimum of eight percent of the cost of production for

processing operations.

Petitioners added an amount for packing in steel drums

based on a U.S. producer's cost per drum.

Based on our analysis of the petition and petitioners' subsequent

amendments, we have made certain adjustments to petitioners' FMV

calculations as follows:

We disallowed additional transportation and land-leasing

expenses for western honeybee beekeeping because they are based on U.S.

costs, and are either inadequately supported or are based on incomplete

methodology (i.e., with regard to transportation, petitioners have

failed to take into account the increase in yield associated with

migratory beekeeping).

We adjusted beekeeping costs to offset the costs

associated with beekeeping services and products other than honey.

We valued packing costs associated with steel drums using

Indian import statistics rather than U.S. costs.

We have revised the FMV calculation for the eastern bee

using a higher yield, as derived from the supporting data for the

eastern bee presented in the petitioners' foreign market research.

Fair Value Comparisons

Based on a comparison of USP and FMV, petitioners' alleged dumping

margins, as revised by the Department, range from 30.95 to 49.24

percent.

Initiation of Investigation

We have examined the petition on honey and have found that the

petition meets the requirements of section 732(b) of the Act.

Therefore, we are initiating an antidumping duty investigation to

determine whether imports of honey from the PRC are being, or are

likely to be, sold in the United States at less than fair value.

International Trade Commission (ITC) Notification

Section 732(d) of the Act requires us to notify the ITC of this

action and we have done so.

Preliminary Determination by the ITC

The ITC will determine by November 17, 1994, whether there is a

reasonable indication that an industry in the United States is

materially injured, or is threatened with material injury, by reason of

imports of honey from the PRC. A negative ITC determination will result

in a termination of the investigation; otherwise, the investigation

will proceed according to statutory and regulatory time limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: October 24, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-26894 Filed 10-28-94; 8:45 am]

BILLING CODE 3510-DS-M