Certain Preserved Mushrooms From India: Preliminary Results of Antidumping Duty Administrative Review, 10597-10604 [E5-903]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 42 (Friday, March 4, 2005)]
[Notices]
[Pages 10597-10604]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-903]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-813]


Certain Preserved Mushrooms From India: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to timely requests by two manufacturers/exporters 
and the

[[Page 10598]]

petitioner,\1\ the Department of Commerce (the Department) is 
conducting an administrative review of the antidumping duty order on 
certain preserved mushrooms from India with respect to four companies. 
The period of review (POR) is February 1, 2003, through January 31, 
2004.
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    \1\ The petitioner is the Coalition for Fair Preserved Mushroom 
Trade which includes the following domestic companies: L.K. Bowman, 
Inc., Monterey Mushrooms, Inc., Mushroom Canning Company, and Sunny 
Dell Foods, Inc.
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    We preliminarily determine that sales have been made below normal 
value (NV). Interested parties are invited to comment on these 
preliminary results. If these preliminary results are adopted in our 
final results of administrative review, we will instruct U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on all 
appropriate entries.

DATES: Effective Date: March 4, 2005.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Kate Johnson, 
AD/CVD Operations, Office 2, Import Administration--Room B099, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4136 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1999, the Department published in the Federal 
Register an amended final determination and antidumping duty order on 
certain preserved mushrooms from India (64 FR 8311).
    In response to timely requests by two manufacturers/exporters, Agro 
Dutch Foods Ltd. (Agro Dutch) and Premier Mushroom Farms (Premier), as 
well as the petitioner, the Department published a notice of initiation 
of an administrative review with respect to the following companies: 
Agro Dutch, Dinesh Agro Products, Ltd. (Dinesh Agro), Flex Foods, Ltd. 
(Flex Foods), Himalya International, Ltd. (Himalya), Premier, 
Saptarishi Agro Industries Ltd. (Saptarishi Agro), and Weikfield Agro 
Products Ltd. (Weikfield) (69 FR 15788, March 26, 2004). The POR is 
February 1, 2003, through January 31, 2004.
    On March 29, 2004, the Department issued antidumping duty 
questionnaires to the above-mentioned companies. We received responses 
to the original questionnaire during the period May through June 2004 
from Agro Dutch, Flex Foods, Premier, and Weikfield.
    On June 24, 2004, the petitioner timely withdrew its request for 
review with respect to Dinesh Agro, Himalya, and Saptarishi Agro. 
Accordingly, we published a Notice of Partial Rescission of Antidumping 
Duty Administrative Review, 69 FR 58393 (September 30, 2004) with 
respect to Dinesh Agro, Himalya, and Saptarishi Agro.
    We issued supplemental questionnaires to Agro Dutch, Flex Foods, 
Premier, and Weikfield during the period July 2004 through January 
2005, and received responses from these companies during the period 
August 2004 through February 2005.
    On June 18, June 25, and July 12, 2004, the petitioner timely 
requested that the Department initiate cost investigations with respect 
to home market sales of subject merchandise made by Premier, Weikfield 
and Flex Foods, respectively. With respect to Weikfield, we did not 
consider the allegation because we had already initiated a cost 
investigation and requested that Weikfield respond to the cost of 
production (COP) portion of the Section D questionnaire. Specifically, 
we stated in the Department's antidumping questionnaire issued on March 
29, 2004, that because we disregarded sales that were below the COP in 
the most recently completed administrative review (i.e., the 2001-2002 
review), Weikfield was required to respond to Section D of the 
questionnaire. We received Weikfield's response on May 24, 2004.
    With respect to Premier, we also did not consider the allegation 
because we found sales made below the COP in the final results of the 
2002-2003 administrative review (see Certain Preserved Mushrooms From 
India: Final Results of Antidumping Duty Administrative Review, 69 FR 
51630 (August 20, 2004)). Accordingly, on August 20, 2004, we requested 
that Premier respond to Section D of the questionnaire. We received 
Premier's response on September 10, 2004.
    With respect to Flex Foods, we analyzed the petitioner's cost 
allegation and determined that the petitioner did not provide a 
reasonable basis to believe or suspect that Flex Foods was selling 
certain preserved mushrooms in India at prices below the COP. 
Therefore, on September 15, 2004, we decided not to initiate an 
investigation to determine whether Flex Foods' home market sales of 
preserved mushrooms were made at prices below the COP during the POR. 
See Petitioner's Allegation of Sales Below the Cost of Production for 
Flex Foods Limited, Memorandum to File, dated September 15, 2004.
    In the March 29, 2004, questionnaire, we advised Agro Dutch that, 
if the Department found sales below COP in the final results of the 
2002-2003 administrative review, the Department would request that Agro 
Dutch respond to section D of the antidumping questionnaire. Agro Dutch 
submitted its section D response as part of its original questionnaire 
response on June 4, 2004. Subsequently, we determined that Agro Dutch 
made comparison market sales below the COP in the final results of the 
2002-2003 administrative review (see Certain Preserved Mushrooms From 
India: Final Results of Antidumping Duty Administrative Review, 69 FR 
51630 (August 20, 2004)); thus, we automatically initiated a sales-
below-cost investigation on Agro Dutch's third country sales in the 
current review.
    On October 15, 2004, the Department extended the time limit for the 
preliminary results in this review until February 28, 2005. See Certain 
Preserved Mushrooms from the People's Republic of China and India: 
Notice of Extension of Time Limit for Preliminary Results in 
Antidumping Duty Administrative Reviews, 69 FR 61202.
    On October 25, 2004, the petitioner made a second timely allegation 
that Flex Foods sold certain preserved mushrooms in its home market at 
prices below the COP. Based on this allegation, on November 30, 2004, 
the Department found reasonable grounds to believe or suspect that Flex 
Foods was selling certain preserved mushrooms in India at prices below 
the COP and initiated a cost investigation of Flex Foods' home market 
sales (see Petitioner's Second Allegation of Sales Below the Cost of 
Production for Flex Foods Limited, Memorandum From The Team to Louis 
Apple, dated November 30, 2004 (Flex Foods COP Initiation Memo)).
    On February 3 and 7, 2005, the petitioner submitted comments with 
respect to the preliminary results calculations for Weikfield and Flex 
Foods, respectively.

Scope of the Order

    The products covered by this order are certain preserved mushrooms, 
whether imported whole, sliced, diced, or as stems and pieces. The 
preserved mushrooms covered under this order are the species Agaricus 
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to 
mushrooms that have been prepared or preserved by cleaning, blanching, 
and sometimes slicing or cutting. These mushrooms are then packed and 
heated in containers including but not limited to cans or glass jars in 
a suitable liquid medium, including but not limited to water, brine, 
butter or butter sauce. Preserved mushrooms may be imported whole, 
sliced, diced, or as stems and pieces.

[[Page 10599]]

Included within the scope of this order are ``brined'' mushrooms, which 
are presalted and packed in a heavy salt solution to provisionally 
preserve them for further processing.
    Excluded from the scope of this order are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.
    The merchandise subject to this order is currently classifiable 
under subheadings 2003.10.0127, 2003.10.0131, 2003.10.0137, 
2003.10.0143, 2003.10.0147, 2003.10.0153 and 0711.51.0000 of the 
Harmonized Tariff Schedule of the United States (HTS). Although the HTS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope of this order dispositive.

Fair Value Comparisons

    To determine whether sales of certain preserved mushrooms by the 
respondents to the United States were made at less than NV, we compared 
export price (EP), as appropriate, to the NV, as described in the 
``Export Price'' and ``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual U.S. transactions to the weighted-average NV of the foreign 
like product where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents covered by the description in the 
``Scope of the Order'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
We compared U.S. sales to sales made in the home market (Premier, 
Weikfield, and Flex Foods) or third country market (Agro Dutch) within 
the contemporaneous window period, which extends from three months 
prior to the U.S. sale until two months after the sale. Where there 
were no sales of identical merchandise in the comparison market made in 
the ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to sales of the most similar foreign like product made in the 
ordinary course of trade. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
the respondents in the following order: preservation method, container 
type, mushroom style, weight, grade, container solution, and label 
type.

Export Price

    For Agro Dutch, Flex Foods, Premier, and Weikfield, we used EP 
methodology, in accordance with section 772(a) of the Act, because the 
subject merchandise was sold directly by the producer/exporter in India 
to the first unaffiliated purchaser in the United States prior to 
importation and constructed export price (CEP) methodology was not 
otherwise indicated. We based EP on packed prices to unaffiliated 
purchasers in the United States.
    We did not make an adjustment to EP for the freight expense offset 
claimed by Agro Dutch and Premier because such an adjustment is not 
contemplated by the Act or the Department's regulations. Specifically, 
the program described by the respondents, granting an international 
freight subsidy from the Indian Agricultural and Processed Food 
Products Export Development Authority for the export of certain food 
products, is not contingent upon importation of inputs used to produce 
the exported subject merchandise--the duty drawback system contemplated 
under section 772(c)(1)(B) of the Act. Neither is it packing (as 
contemplated under section 772(c)(1)(A) of the Act) nor the amount of 
any countervailing duty, as there is no companion countervailing duty 
investigation on certain preserved mushrooms from India (see section 
772(c)(1) of the Act). Accordingly, we disregarded the claimed amounts 
for purposes of the preliminary results.

Agro Dutch

    Agro Dutch reported its U.S. sales on an FOB Indian port, CIF or 
ex-dock duty paid basis. We made deductions from the starting price, 
where appropriate, for international freight, foreign inland freight, 
transportation insurance, foreign and U.S. brokerage and handling, and 
U.S. duty in accordance with section 772(c)(2) of the Act and 19 CFR 
351.402.

Flex Foods

    Flex Foods reported its U.S. sales on a C&F basis. We made 
deductions from the starting price, where appropriate, for 
international freight and foreign inland freight, in accordance with 
section 772(c)(2) of the Act and 19 CFR 351.402.

Premier

    Premier reported its U.S. sales on an FOB Hyderabad basis. We made 
a deduction from the starting price, where appropriate, for brokerage 
and handling expenses, in accordance with section 772(c)(2) of the Act 
and 19 CFR 351.402. For certain invoices, we reduced the reported gross 
prices by the amount of price reductions taken by the customer for 
rejected merchandise and other items. See Preliminary Results 
Calculation Memorandum for Premier Mushroom Farms (Premier), Memorandum 
to the File from Kate Johnson, dated February 25, 2005 (Premier 
Calculation Memorandum).

Weikfield

    Weikfield reported its U.S. sales on an FOB Indian port, delivered 
duty paid, or C&F basis. We made deductions from the starting price, 
where appropriate, for foreign inland freight, foreign inland and 
marine insurance, foreign and U.S. brokerage and handling expenses, 
international freight, and U.S. duty, in accordance with section 
772(c)(2) of the Act and 19 CFR 351.402.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the respondents' volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(C) of the Act.
    With regard to Flex Foods, Premier, and Weikfield, the aggregate 
volume of home market sales of the foreign like product was greater 
than five percent of the aggregate volume of U.S. sales of the subject 
merchandise. Therefore, we determined that the home market provides a 
viable basis for calculating NV for Flex Foods, Premier, and Weikfield.
    With regard to Agro Dutch, we determined that the home market was 
not viable because Agro Dutch's aggregate volume of home market sales 
of the foreign like product was less than five percent of its aggregate 
volume of U.S. sales of the subject merchandise. However, we determined 
that the third country market of Israel was viable, in accordance with 
section 773(a)(1)(B)(ii) of the Act. Therefore, pursuant to section 
773(a)(1)(C) of the Act, we used third country sales as a basis for NV 
for Agro Dutch.

Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on

[[Page 10600]]

sales at the same level of trade (LOT) as the EP or CEP. Sales are made 
at different LOTs if they are made at different marketing stages (or 
their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing 
(id.); see also Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa 
(Plate from South Africa) 62 FR 61731, 61732 (November 19, 1997). In 
order to determine whether the comparison sales were at different 
stages in the marketing process from the U.S. sales, we reviewed the 
distribution system in each market (i.e., the ``chain of 
distribution''), including selling functions, class of customer 
(``customer category''), and the level of selling expenses for each 
type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices \2\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \2\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses and profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the EP 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, and where the difference affects price comparability, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if an NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa at 61731. We obtained information from the 
respondents regarding the marketing stages involved in making the 
reported foreign market and U.S. sales, including a description of the 
selling activities performed for each channel of distribution. Company-
specific LOT findings are summarized below.

Agro Dutch

    Agro Dutch sold to importers/traders through one channel of 
distribution in both the U.S. and Israeli markets. As described in its 
questionnaire response, Agro Dutch performs no selling functions in the 
United States or in any of the third countries to which it sells, 
including Israel. Therefore, these sales channels are at the same LOT. 
Accordingly, all sales comparisons are at the same LOT for Agro Dutch 
and an adjustment pursuant to section 773(a)(7)(A) is not warranted.

Flex Foods

    Flex Foods sold only to distributors/manufacturers through one 
channel of distribution in both the U.S. and home markets. In its 
questionnaire responses, Flex Foods did not report any selling 
functions in the home or U.S. market. In addition, Flex Foods reported 
that it did not incur any technical service, advertising, or 
warehousing expenses in either the home market or the United States. 
Based on our analysis of its responses, we preliminarily determine that 
Flex Foods' sales in both markets are all at the same LOT. Accordingly, 
an adjustment pursuant to section 773(a)(7)(A) is not warranted.

Premier

    In the home market, Premier sold directly to small local 
distributors, hotels, and small retailers. We examined Premier's home 
market distribution system, including selling functions, classes of 
customers, and selling expenses, and determined that Premier offers the 
same support and assistance to all its home market customers. 
Accordingly, all of Premier's home market sales are made through the 
same channel of distribution and constitute one LOT.
    With regard to sales to the United States, Premier made only EP 
sales to large distributors. We examined Premier's U.S. distribution 
system and determined that Premier does not perform any selling 
functions or activities in conjunction with its U.S. sales except for 
making freight arrangements. Accordingly, all of Premier's U.S. sales 
are made through the same channel of distribution and constitute one 
LOT. This EP LOT differed considerably from the home market LOT with 
respect to sales process, advertising, and inventory maintenance. 
Consequently, we could not match the EP LOT to sales at the same LOT in 
the home market. Because there was only one LOT in the home market, 
there was no pattern of consistent price differences between different 
LOTs in the home market, and we do not have any other information that 
provides an appropriate basis for determining an LOT adjustment. 
Accordingly, we have not made an LOT adjustment. See section 
773(a)(7)(A) of the Act.

Weikfield

    As noted in past reviews (see, e.g., Certain Preserved Mushrooms 
from India: Preliminary Results of Antidumping Duty Administrative 
Review, 69 FR 10659, 10633 (March 8, 2004) (AR4 Preliminary Results)), 
Weikfield's home market sales are made via two channels of 
distribution: (a) Direct sales to large quantity end-users, and b) 
sales to distributors and ``carrying and forwarding'' (C&F) agents, 
which either resell the merchandise to small quantity end-users, or act 
as Weikfield's agent in selling and distributing the merchandise to 
small quantity end-users. We examined Weikfield's home market 
distribution system, including selling functions, classes of customers, 
and selling expenses, and determined that Weikfield offers the same 
support and assistance to all its home market customers except with 
respect to sales promotion activities. In the Indian states of 
Maharashtra and Goa, Weikfield's affiliate WPCL includes Weikfield's 
preserved mushroom products in its market development activities to 
promote sales.
    With respect to such activities as sales negotiation, freight and 
distribution services, and inventory maintenance, the two home market 
distribution channels involve the same services performed by Weikfield. 
With respect to sales promotion activities, the level of sales 
promotion activities performed by WPCL for certain home market sales 
are not so extensive as to constitute a separate LOT. Accordingly, we 
consider all of Weikfield's home market sales to constitute one LOT.
    With regard to sales to the United States, Weikfield made only EP 
sales to importers/traders. We examined Weikfield's U.S. distribution 
system, including selling functions, classes of customers, and selling 
expenses, and determined that Weikfield offers the same support and 
assistance to all its U.S. customers. Accordingly, all of Weikfield's 
U.S. sales are made through the same channel of distribution and 
constitute one LOT.
    Weikfield contends in its August 16, 2004, response at page 5 that 
the EP

[[Page 10601]]

LOT is significantly different from the home market LOT because 
Weikfield states that it or WPCL actively markets its products to its 
home market customers and their customers, while it does not do so for 
its U.S. customers. We compared the EP LOT to the home market LOT and 
concluded that the selling functions performed for home market 
customers are sufficiently similar to those performed for U.S. 
customers. As we determined in the prior review (AR4 Preliminary 
Results at 10633), and as discussed in Weikfield's questionnaire 
responses in the instant review, apart from the promotion activities 
conducted by WPCL on Weikfield's behalf in the home market, which are 
not extensive, as discussed above, Weikfield does not perform different 
selling activities in either the U.S. or home markets. Except for the 
occasional handling of customer complaints, Weikfield reports that it 
does not offer or perform selling activities in either market. 
Accordingly, we consider the EP and home market LOTs to be the same. 
Consequently, we are comparing EP sales to sales at the same LOT in the 
home market.

Cost of Production Analysis

    As stated in the ``Background'' section of this notice, based on a 
timely allegation filed by the petitioner, the Department initiated an 
investigation to determine whether Flex Foods' home market sales were 
made at prices less than the COP within the meaning of section 773(b) 
of the Act. See Flex Foods COP Initiation Memo.
    In addition, the Department disregarded certain sales made by 
Weikfield in the 2001-2002 administrative review and certain sales made 
by Agro Dutch and Premier in the 2002-2003 administrative review, 
pursuant to findings in those reviews that sales failed the cost test 
(see Notice of Final Results of Antidumping Duty Administrative Review: 
Certain Preserved Mushrooms from India, 68 FR 41303 (July 11, 2003) and 
Notice of Final Results of Antidumping Duty Administrative Review: 
Certain Preserved Mushrooms from India, 69 FR 51630 (August 20, 2004). 
Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are 
reasonable grounds to believe or suspect that Agro Dutch, Premier, and 
Weikfield made sales in the home market or third country at prices 
below the cost of producing the merchandise in the current review 
period.

A. Calculation of Cost of Production

    We calculated the COP on a product-specific basis, based on the sum 
of each company's respective costs of materials and fabrication for the 
foreign like product, plus amounts for selling, general and 
administrative (SG&A) expenses, interest expense, and all expenses 
incidental to placing the foreign like product in a condition packed 
ready for shipment in accordance with section 773(b)(3) of the Act.
    We relied on the COP information submitted by Agro Dutch, Flex 
Foods, Premier, and Weikfield, except for the adjustments discussed 
below. With respect to Flex Foods, although certain deficiencies 
continue to exist in its COP responses, including the reporting of 
fresh mushroom costs, general and administrative (G&A) expenses, and 
interest expenses, we have determined that the use of facts available 
based on adverse inferences under section 776(b) of the Act is not 
warranted because, based on Flex Foods' level of participation and 
cooperation in this review, Flex Foods did not fail to act to the best 
of its ability in this review.

Flex Foods

    1. Flex Foods incorrectly reported different fresh mushroom costs 
for its sales of whole/sliced preserved mushrooms and its sales of 
preserved mushroom pieces and stems, claiming, contrary to the 
Department's consistent practice, that its fresh mushroom costs for 
pieces and stem products should be valued significantly less than its 
fresh mushroom costs for whole/sliced products. Furthermore, Flex 
Foods' reported fresh mushroom costs, and the underlying reconciliation 
worksheets submitted in the February 8, 2005, response, did not tie to 
Flex Foods' financial statement data. Consistent with our longstanding 
practice in the preserved mushrooms proceedings of assigning the same 
cost to the fresh mushrooms grown by the respondent and used in the 
production of the preserved mushrooms without regard to mushroom style, 
we recalculated these costs to reflect one weighted-average fresh 
mushroom cost for all products. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Preserved Mushrooms from India, 
63 FR 72246, 72248, (December 31, 1998) (wherein the Department stated 
that ``* * * the cost-generating elements of growing mushrooms for both 
preserved and fresh, whole or pieces, large or small mushrooms are 
identical. * * *''), and Certain Preserved Mushrooms From Indonesia: 
Final Results of Antidumping Duty Administrative Review, 66 FR 36754, 
July 13, 2001, Issues and Decision Memorandum at Comment 2.
    Specifically, we recalculated a fresh mushroom material cost for 
the POR based on the raw material data provided in Flex Foods' 2003-
2004 financial statement and the reported POR adjustments in Annexure 
B(10) of the February 8, 2005, response. Because Flex Foods did not 
report a POR breakdown for the labor and variable overhead costs 
related to the growing and harvesting of the fresh mushrooms, we 
recalculated the labor and variable overhead costs related to the 
growing and harvesting of fresh mushrooms using the fiscal year 2003-
2004 labor and variable overhead farming costs reported by Flex Foods 
in Annexure 1 of the February 8, 2005, response, which tied to the Flex 
Foods' 2003-2004 financial statement. To this calculated total fresh 
mushroom cost per kilogram, we applied a fresh mushroom to canned 
mushroom yield-loss ratio derived from Flex Foods' submitted data to 
obtain a total fresh mushroom cost on a kilogram per net drained-weight 
basis. See Flex Foods Ltd. Preliminary Results Calculation Memorandum, 
Memorandum to the File from Sophie Castro and P. Lee Smith, dated 
February 25, 2005 (Flex Foods Calculation Memorandum).
    2. Flex Foods reported its G&A and interest expenses based on its 
2002-2003 financial statements. We recalculated the G&A and interest 
expenses consistent with the 2003-2004 financial statements which most 
closely corresponded to the POR in accordance with our normal practice 
(see Flex Foods Calculation Memorandum).
    3. In calculating its fixed overhead expenses, Flex Foods included 
G&A expenses related to canning. We reclassified the canning-related 
G&A expenses included in the fixed overhead costs to the company-wide 
G&A expenses, consistent with our normal practice (see Flex Foods 
Calculation Memorandum).
    4. Flex Foods failed to report cost data for one of its home market 
products. We used the cost reported for a similar product/control 
number as facts available under section 776(a)(1) of the Act (see Flex 
Foods Calculation Memorandum).
    We intend to issue Flex Foods an additional supplemental 
questionnaire after the preliminary results to allow it a final 
opportunity to address the remaining deficiencies in its COP responses 
prior to the final results of this review.

Weikfield

    1. We revised the reported G&A expense to reflect the corrected 
ratio

[[Page 10602]]

reported at revised Exhibit SD-9 in the January 15, 2005, submission.

B. Test of Home or Third Country Market Prices

    For all four companies, on a product-specific basis, we compared 
the weighted-average COP to the prices of home market or third country 
market sales of the foreign like product, as required by section 773(b) 
of the Act, in order to determine whether these sales were made at 
prices below the COP. For purposes of this comparison, we used COP 
exclusive of selling and packing expenses. The prices (inclusive of 
interest revenue, where appropriate) were exclusive of any applicable 
movement charges, discounts, direct and indirect selling expenses and 
packing expenses, revised where appropriate as discussed below under 
``Price-to-Price Comparisons.'' In determining whether to disregard 
home market sales made at prices less than their COP, we examined, in 
accordance with sections 773(b)(1)(A) and (B) of the Act, whether such 
sales were made: (1) Within an extended period of time, (2) in 
substantial quantities; and (3) at prices which did not permit the 
recovery of all costs within a reasonable period of time.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product during the POR were at prices less than the 
COP, we disregarded the below-cost sales because we determined that 
they represented ``substantial quantities'' within an extended period 
of time, and were at prices which would not permit the recovery of all 
costs within a reasonable period of time, in accordance with section 
773(b)(1) of the Act.
    The results of our cost test for Weikfield indicated that less than 
20 percent of home market sales of any given product were at prices 
below COP. We therefore retained all sales in our analysis and used 
them as the basis for determining NV.
    The results of our cost tests for Agro Dutch, Flex Foods and 
Premier indicated that, for certain products, more than 20 percent of 
home market or third country sales within an extended period of time 
were at prices below COP which would not permit the full recovery of 
all costs within a reasonable period of time. See 773(b)(2) of the Act. 
Therefore, in accordance with section 773(b)(1) of the Act, we excluded 
these below-cost sales from our analysis and used the remaining sales 
as the basis for determining NV.

Price-to-Price Comparisons

    For all four respondents, we based NV on the price at which the 
foreign like product is first sold for consumption in the home market 
or third country market, in the usual commercial quantities and in the 
ordinary course of trade, and at the same LOT as EP, where possible, as 
defined by section 773(a)(1)(B)(i) of the Act.
    Home market or third country prices were based on ex-Hyderabad, FOB 
Indian port, or delivered prices. We reduced the starting price for 
billing adjustments (Agro Dutch), discounts (Weikfield) and movement 
expenses (Agro Dutch, Flex Foods, Premier and Weikfield), and increased 
the starting price for interest revenue (Premier), where appropriate, 
in accordance with section 773(a)(6) of the Act and 19 CFR 351.401.
    We disregarded Agro Dutch's claimed freight expense offset for 
certain third country sales, granted under the Indian government 
program discussed in the ``Export Price'' section above, because this 
type of adjustment to NV is not contemplated by section 773(a)(6) of 
the Act or the Department's regulations.
    We recalculated Premier's interest revenue consistent with 
Premier's February 10, 2005, submission. We reclassified Premier's home 
market discounts as commissions, consistent with our treatment of this 
adjustment in the 2002-2003 administrative review (see Certain 
Preserved Mushrooms from India: Preliminary Results of Antidumping Duty 
Administrative Review, 69 FR 10659 (March 8, 2004)), as affirmed in our 
final results (see Certain Preserved Mushrooms from India: Final 
Results of Antidumping Duty Administrative Review, 69 FR 51630 (August 
20, 2004)).
    As indicated at page 3 of Weikfield's January 15, 2005, submission, 
Weikfield shipped merchandise to certain home market customers using 
Weikfield's own trucks. Therefore, consistent with our treatment in the 
previous review (see AR4 Preliminary Results at 10644), we did not 
deduct movement expenses from the starting price for these sales.
    We also reduced the starting price for packing costs incurred in 
the home market, in accordance with section 773(a)(6)(B)(i) of the Act, 
and increased NV to account for U.S. packing expenses in accordance 
with section 773(a)(6)(A) of the Act. We made circumstance-of-sale 
adjustments for credit expenses and bank fees, where appropriate, 
pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. In 
addition, we made adjustments to NV, where appropriate, for differences 
in costs attributable to differences in the physical characteristics of 
the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act and 19 
CFR 351.411. For Premier and Weikfield, we made an adjustment to NV to 
account for commissions paid in the home market but not in the U.S. 
market, in accordance with 19 CFR 351.410(e). As the offset for home 
market commissions, we applied the lesser of home market commissions or 
U.S. indirect selling expenses.
    As in past reviews, Weikfield contends that its commission payments 
to WPCL on certain sales are at arm's length. In the instant review, 
Weikfield claims that, due to changes in the equity ownership of 
Weikfield, as listed in Exhibit A-3 of the May 24, 2004, questionnaire 
response, Weikfield is not controlled by WPCL, implying that Weikfield 
and WPCL should not be considered affiliated parties for purposes of 
considering whether commissions were made at arm's length. However, our 
analysis of the ownership structure in that response indicates no 
substantive change in Weikfield's ownership structure or affiliation 
with WPCL. Even if the issuance of additional stock may dilute the 
nominal ownership of Weikfield by affiliated parties, it does not 
change the fundamental nature of the affiliation between Weikfield and 
WPCL, which remain closely tied through common shareholders as well as 
WPCL's shareholdings in Weikfield. Weikfield has offered no additional 
evidence to support its arm's-length claim. Therefore, consistent with 
our treatment in the two previous reviews, we have not considered 
Weikfield's commission payments to WPCL on home market and U.S. sales 
to be at arm's length, and instead have included the selling expenses 
incurred by WPCL on Weikfield's behalf as part of Weikfield's indirect 
selling expenses. See Certain Preserved Mushrooms From India: Final 
Results of Antidumping Duty Administrative Review, 68 FR 41303 (July 
11, 2003) (AR3 Final Results), Issues and Decision Memorandum at 
Comments 4 and 7.
    We recalculated Weikfield's home market and U.S. imputed credit 
expenses because the amounts reported in its sales listings did not 
reconcile with the methodology described in the questionnaire response. 
In addition, we recalculated the home market credit

[[Page 10603]]

expense in order to deduct freight expenses from the price base for 
sales made on a freight-collect basis.To calculate home market and U.S. 
indirect selling expenses, we used the indirect selling expense ratios 
Weikfield reported in its January 15, 2005, submission at revised 
Exhibit C-3.

Calculation of Constructed Value

    We calculated CV in accordance with section 773(e) of the Act, 
which indicates that CV shall be based on the sum of each respondent's 
cost of materials and fabrication for the subject merchandise, plus 
amounts for SG&A expenses, profit and U.S. packing costs. We relied on 
the submitted CV information except for the following adjustments:

Flex Foods

    We made the same adjustments to the CV data as we made to the COP 
data, as discussed above under ``Calculation of Cost of Production.''

Weikfield

    We made the same adjustments to the CV data as we made to the COP 
data, as discussed above under ``Calculation of Cost of Production.''

Price-to-Constructed Value Comparisons

    For each respondent, we made only price-to-price comparisons as 
there were contemporaneous above-cost sales in each comparison market 
to match to each U.S. sale.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on the exchange rates in effect on the dates of the U.S. 
sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margins for the period February 1, 2003, 
through January 31, 2004, are as follows:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/exporter                        margin
------------------------------------------------------------------------
Agro Dutch Foods, Ltd........................................       2.79
Flex Foods, Ltd..............................................     114.76
Premier Mushroom Farms.......................................      41.67
Weikfield Agro Products, Ltd.................................      25.69
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of publication. See 19 CFR 351.310(c). If 
requested, a hearing will be scheduled after determination of the 
briefing schedule.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c).
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs. Case briefs from interested parties and 
rebuttal briefs, limited to the issues raised in the respective case 
briefs, may be submitted in accordance with a schedule to be 
determined. Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations, and cases cited.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries, in accordance with 19 CFR 351.212. 
The Department will issue appropriate appraisement instructions for the 
companies subject to this review directly to CBP within 15 days of 
publication of the final results of this review.
    With respect to Agro Dutch, Flex Foods, Premier and Weikfield, we 
intend to calculate importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins calculated for all of 
the U.S. sales examined and dividing this amount by the total entered 
value of the sales examined.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). See 19 CFR 351.106(c)(1). 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the final 
results of this review and for future deposits of estimated duties, 
where applicable.

Cash Deposit Requirements

    The following cash 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 by section 
751(a)(1) of the Act: (1) The cash deposit rates for the reviewed 
companies will be those established in the final results of this 
review, except if the rate is less than 0.50 percent, and therefore, de 
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the 
cash deposit rate will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the original less-than-fair-value (LTFV) 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (4) the cash deposit rate for all other 
manufacturers or exporters will continue to be 11.30 percent, the ``All 
Others'' rate made effective by the LTFV investigation (see Notice of 
Amendment of Final Determination of Sales at Less Than Fair Value and 
Antidumping Duty Order: Certain Preserved Mushrooms From India, 64 FR 
8311 (February 19, 1999)). These requirements, when imposed, shall 
remain in effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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 published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.


[[Page 10604]]


    Dated: February 25, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-903 Filed 3-3-05; 8:45 am]
BILLING CODE 3510-DS-P