U.S. International Trade Commission

Publication 4076 May 2009

Washington, DC 20436

Citric Acid and Certain Citrate Salts from 

Canada and China

Investigation Nos. 701-TA-456 and 731-TA-1151-1152 (Final)
U.S. International Trade Commission

COMMISSIONERS 

 

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert

Robert A. Rogowsky

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Director of Operations

Christopher Cassise, Investigator 

Jeff Clark, Industry Analyst 

Amelia Preece, Economist 

Justin Jee, Accountant 

Steve Hudgens, Senior Statistician 

Mary Jane Alves, Attorney 

George Deyman, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4076 May 2009

Citric Acid and Certain Citrate Salts from 

Canada and China

Investigation Nos. 701-TA-456 and 731-TA-1151-1152 (Final)

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Determinations ................................................................. 1

Views of the Commission ......................................................... 3

Dissenting views of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and 

Commissioner Deanna Tanner Okun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Part I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Nature and extent of sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Nature of countervailable subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Intermediate product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

Part II: Conditions of competition in the U.S. market ................................ II-1

U.S. market segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

Supply and demand considerations ................................................ II-3

U.S. supply ............................................................... II-3

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-8

Substitutability issues .......................................................... II-12

Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-12

Response if subject imports were no longer available ............................... II-13

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-14

Comparisons of domestic products and subject imports ............................. II-18

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-22

U.S. supply elasticity ........................................................ II-23

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-23

Substitution elasticity ....................................................... II-23

Part III: U.S. producers’ production, shipments, and employment ...................... III-1

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

U.S. capacity, production, and capacity utilization ................................... III-2

U.S. producers’ U.S. shipments and export shipments ................................. III-3

U.S. producers’ imports and purchases of imports .................................... III-5

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

U.S. employment, wages, and productivity ......................................... III-5
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Part IV: U.S. imports, apparent consumption, and market shares . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Fungibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Geographical markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Simultaneous presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Raw material costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Transportation costs to the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

Price trends and comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-19

Part VI: Financial experience of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Operations on citric acid and certain citrate salts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-8

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-8

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-9

Part VII: Threat considerations and information on producers in nonsubject countries .... VII-1

The industry in Canada ......................................................... VII-2

The industry in China .......................................................... VII-3

Combined industry data for both subject countries ................................... VII-6

 U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-8

Antidumping and countervailing duty orders in third-country markets .................... VII-8

Information on producers in nonsubject countries .................................... VII-8
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Appendixes

A. Federal Register notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. Hearing witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

D. Largest purchasers’ data on bids and prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

Note.--Information that would reveal confidential operations of individual concerns may not be published

and therefore has been deleted from this report. Such deletions are indicated by asterisks.

 1

 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)).

 2

 Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and Commissioner Deanna Tanner Okun

determined that an industry in the United States is not materially injured or threatened with material injury by reason

of imports from Canada and China of citric acid and certain citrate salts.

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-456 and 731-TA-1151-1152 (Final)

CITRIC ACID AND CERTAIN CITRATE SALTS FROM CANADA AND CHINA

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to sections 705(b) and 735(b) of the Tariff Act of

1930 (19 U.S.C. §§ 1671d(b) and 1673d(b)) (the Act), that an industry in the United States is materially

injured2

 by reason of imports from Canada and China of citric acid and certain citrate salts, provided for

in subheadings 2918.14.00, 2918.15.10, and 2918.15.50 of the Harmonized Tariff Schedule of the United

States, that have been found by the Department of Commerce (Commerce) to be subsidized by the

Government of China and to be sold in the United States at less than fair value (LTFV). 

BACKGROUND

The Commission instituted these investigations effective April 14, 2008, following receipt of a

petition filed with the Commission and Commerce by Archer Daniels Midland Co., Decatur, IL; Cargill,

Inc., Wayzata, MN; and Tate & Lyle Americas, Inc., Decatur, IL. The final phase of the investigations

was scheduled by the Commission following notification of preliminary determinations by Commerce

that imports of citric acid and certain citrate salts from China were being subsidized within the meaning

of section 703(b) of the Act (19 U.S.C. § 1671b(b)) and that imports of citric acid and certain citrate salts

from Canada and China were being sold at LTFV within the meaning of section 733(b) of the Act (19

U.S.C. § 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and

of a public hearing to be held in connection therewith was given by posting copies of the notice in the

Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the

notice in the Federal Register of December 4, 2008 (73 FR 73955). The hearing was held in Washington,

DC, on April 7, 2009, and all persons who requested the opportunity were permitted to appear in person

or by counsel.

 1

 Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun find that an industry in the United States

is neither materially injured nor threatened with material injury by reason of imports of citric acid and certain citrate

salts from Canada and China that Commerce found were sold at less than fair value and imports from China that

Commerce found were subsidized by the Government of China. Except as otherwise noted, they join the discussion

and analysis in sections I to V.B of this opinion and provide the remainder of their analysis in separate views. See

Separate and Dissenting Views of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and Commissioner

Deanna Tanner Okun.

 2 ADM’s production facility is in Southport, North Carolina whereas Cargill’s production facility is in Eddyville,

Iowa, and Tate & Lyle’s production facility is in Dayton, Ohio. See, e.g., Confidential Staff Report, Mem. INV-GG036 at I-1, Table III-1 (Apr. 27, 2009), as amended by Mem. INV-GG-038 (May 7, 2009) (“CR”); Citric Acid and

Certain Citrate Salts from Canada and China, Invs. Nos. 701-TA-456 and 731-TA-1151 to 1152 (Final), USITC Pub.

4076 at I-1, Table III-1 (May 2009) (“PR”).

In December 1999, the same petitioners sought antidumping duty relief against imports of citric acid and

sodium citrate from China. The Commission made a negative preliminary determination. At that time, the

Commission found that imports from China were largely confined to the industrial segment and would not qualify

for two to three years to supply the food and beverage segment, a segment that accounted for two-thirds of the U.S.

market. The Commission also found that fairly traded non-subject imports (primarily from Israel and Austria)

accounted for a majority of imports into the United States, had a significant and growing presence in the U.S.

market, and were of equal quality to domestically produced products. See, e.g., Citric Acid and Sodium Citrate from

China, Inv. No. 731-TA-863 (Prelim.), USITC Pub. 3277 (Feb. 2000).

 3 These consisted of the following producers/exporters: Shandong TTCA Biochemistry Co., Ltd.; Yixing-Union

Biochemical Co., Ltd.; RZBC Group; Anhui BBCA Biochemical Co., Ltd.; Wiefang Ensign Industry Co., Ltd.;

Huangshi Xinghua Biochemical Co., Ltd.; Huozhou Coal Electricity Shanxi Fenhe Biochemistry Co., Ltd.; Shihezi

City Changyun Biochemical Co., Ltd.; A.H.A. International Co., Ltd.; Laiwu Taihe Biochemistry Co., Ltd.; Gansu

Xuejing Biochemical Co., Ltd.; Jiali International Corp.; Hunan Dongting Citric Acid Chemicals Co., Ltd.;

Lianyungang Shuren Scientific Creation Import & Export Co., Ltd.; Jiangsu Gadot Nuobei Biochemical Co., Ltd.;

and Changsha Glorysea Biochemicals Co., Ltd. (hereinafter “Chinese Respondents”).

3

VIEWS OF THE COMMISSION

Based on the record in the final phase of these investigations, we find that an industry in the

United States is materially injured by reason of imports of citric acid and certain citrate salts from Canada

and the People’s Republic of China (“China”) that the U.S. Department of Commerce (“Commerce”)

found to be sold at less than fair value and imports from China that Commerce found to be subsidized by

the Government of China.1

I. BACKGROUND

The petitions in these investigations were filed by the three known U.S. producers of citric acid

and certain citrate salts: Archer Daniels Midland Company (“ADM”) of Decatur, IL; Cargill, Inc.

(“Cargill”) of Wayzata, MN; and Tate & Lyle Americas, Inc. (“Tate & Lyle”) of Decatur, IL.2

Representatives from each petitioning company participated in the preliminary staff conference and in the

Commission’s hearing accompanied by counsel. They filed joint postconference, prehearing and

posthearing briefs and final comments.

In addition to petitioners, several respondents also participated in the staff conference and hearing

and submitted post-conference, prehearing and posthearing briefs, and final comments. These include the

following: Jungbunzlauer Technology GmbH & Co. KG (“JBL Canada”), the only known producer of

subject merchandise in Canada; a number of Chinese producers/exporters;3

 and Procter & Gamble Co.

(“P&G”), a U.S. purchaser and industrial user of citric acid ***. Representatives from and counsel for

U.S. purchaser PepsiCo participated in the Commission’s hearing and submitted prehearing and
 4

 A representative of United Food Corporation, a distributor of various food products in the United States that

imports subject merchandise from China and purchases from the domestic industry, appeared at the staff conference

in the preliminary phase of these investigations. See, e.g., Transcript of May 7, 2008, Preliminary Staff Conference

(“Confer. Tr.”) at 108 (Hsu for United Food Corporation).

 5 See, e.g., CR at I-4.

 6 See, e.g., CR at I-4.

 7 See, e.g., CR at I-4.

 8 See, e.g., CR at I-4.

 9 19 U.S.C. § 1677(4)(A).

 10 19 U.S.C. § 1677(4)(A).

 11 19 U.S.C. § 1677(10).

 12 See, e.g., Cleo, Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v. Department of

Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455

(1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed.

Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts

of each case’”). The Commission generally considers a number of factors, including the following: (1) physical

characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions

of the products; (5) common manufacturing facilities, production processes, and production employees; and, where

appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

(continued...)

4

posthearing briefs as well as final comments. Representatives from and counsel for U.S. purchasers

Reckitt Benckiser (“Reckitt”) and Vertellus Specialties, Inc. (“Vertellus”) participated in the

Commission’s hearing.4

Staff report data on the domestic industry are based on questionnaire responses of the three

petitioning domestic producers that accounted for all U.S. production of citric acid and certain citrate salts

in 2008.5

 U.S. imports from Canada are based on JBL Canada’s importer questionnaire response ***. 

Canadian industry data are based on JBL Canada’s questionnaire response.6

 U.S. imports from China and

non-subject countries are based on official Commerce statistics.7

 Chinese industry data are based on

usable foreign producer questionnaire responses of 14 companies that reported collectively accounting for

approximately 90 percent of Chinese exports to the United States in calendar years 2006, 2007, and 2008

(the “period of investigation”).8

II. DOMESTIC LIKE PRODUCT

A. In General

In determining whether an industry in the United States is materially injured or threatened with

material injury by reason of imports of the subject merchandise, the Commission first defines the

“domestic like product” and the “industry.”9

 Section 771(4)(A) of the Tariff Act of 1930, as amended

(“the Tariff Act”), defines the relevant domestic industry as the “producers as a whole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”10 In turn, the Tariff Act defines “domestic

like product” as “a product which is like, or in the absence of like, most similar in characteristics and uses

with, the article subject to an investigation.”11

The decision regarding the appropriate domestic like product/s in an investigation is a factual

determination, and the Commission has applied the statutory standard of “like” or “most similar in

characteristics and uses” on a case-by-case basis.12 No single factor is dispositive, and the Commission
 12 (...continued)

Trade 1996).

 13 See, e.g., S. Rep. No. 96-249 at 90-91 (1979).

 14 Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249 at 90-91 (1979)

(Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to

permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are

not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent

consideration of an industry adversely affected by the imports under consideration.”).

 15 See, e.g., USEC, Inc. v. United States, 34 Fed. Appx. 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the

class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F.

Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989).

 16 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a

single like product corresponding to several different classes or kinds defined by Commerce); Cleo, 501 F.3d at 1298

n.1 (“Commerce’s {scope} finding does not control the Commission’s [like product] determination.”); Torrington,

747 F. Supp. at 748-52 (affirming the Commission’s determination defining six like products in investigations in

which Commerce found five classes or kinds).

 17 See, e.g., CR at I-8 to I-9. Commerce explained that “Citric acid and sodium citrate are classifiable under

2918.14.0000 and 2918.15.10000 of the Harmonized Tariff Schedule of the United States (“HTSUS”), respectively. 

Potassium citrate and calcium citrate are classifiable under 2918.15.5000 and 3824.90.9290 of the HTSUS. Blends

that include citric acid, sodium citrate, and potassium citrate are classifiable under 3824.90.92.90 of the HTSUS. 

(continued...)

5

may consider other factors it deems relevant based on the facts of a particular investigation.13 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.14

Although the Commission must accept Commerce’s determination as to the scope of the imported

merchandise that is subsidized or sold at less than fair value,15 the Commission determines what domestic

product is like the imported articles Commerce has identified.16

B. Product Description

Commerce defined the imported merchandise within the scope of these investigations as follows:

all grades and granulation sizes of citric acid, sodium citrate, and potassium citrate in

their unblended forms, whether dry or in solution, and regardless of packaging type. The

scope also includes blends of citric acid, sodium citrate, and potassium citrate; as well as

blends with other ingredients, such as sugar, where the unblended form(s) of citric acid,

sodium citrate, and potassium citrate constitute 40 percent or more, by weight, of the

blend. The scope of the investigation also includes all forms of crude calcium citrate,

including dicalcium citrate monohydrate, and tricalcium citrate tetrahydrate, which are

intermediate products in the production of citric acid, sodium citrate, and potassium

citrate. The scope of this investigation does not include calcium citrate that satisfies the

standards set forth in the United States Pharmacopeia and has been mixed with a

functional excipient, such as dextrose or starch, where the excipient constitutes at least 2

percent, by weight, of the product. The scope of this investigation includes the hydrous

and anhydrous forms of citric acid, the dihydrate and anhydrous forms of sodium citrate,

otherwise known as citric acid sodium salt, and the monohydrate and monopotassium

forms of potassium citrate. Sodium citrate also includes both trisodium citrate and

monosodium citrate, which are also known as citric acid trisodium salt and citric acid

monosodium salt, respectively.17
 17 (...continued)

Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the

merchandise is dispositive.” See, e.g., CR at I-9.

The Commission’s negative preliminary opinion in the 1999/2000 investigation defined the domestic like

product as citric acid and sodium citrate, as requested in that petition. See, e.g., USITC Pub. 3277 at 3-7. Unlike the

previous investigation, the scope of the instant investigations includes crude calcium citrate, an intermediate product

resulting when one of three particular processes is used to produce citric acid. ***. See, e.g., CR at I-15. In other

parts of the world, crude calcium citrate is shipped elsewhere for conversion into its only possible use, citric acid. 

For that reason, petitioners included crude calcium citrate in the scope, although they are unaware of any crude

calcium citrate imports into the U.S. market at this time. See, e.g., Petitions, Vol. I at 8-9; Confer. Tr. at 58-59 (Ellis

for Petitioners), 86-87 (Oakley for ADM). The scope also includes certain blends, although petitioners are unaware

of any domestic production or imports of these blends. See, e.g., Confer. Tr. at 61-63 (Ellis for Petitioners). 

Potassium citrate also was not included in the scope of the previous investigation, although the staff report

corresponding to that investigation did include some information about potassium citrate. See, e.g., USITC Pub.

3277 at I-2 to I-4, III-1, Table C-6.

 18 See, e.g., CR at I-13 to I-16.

 19 See, e.g., CR at I-13 to I-15, V-1; Petitioners’ Posthearing Br. at Exh. 2 at 4.

 20 See, e.g., CR at I-13, I-14. During the lime sulfuric acid refining process ***, crude calcium citrate is

produced, but this product’s sole purpose is to be converted into citric acid. See, e.g., CR at I-11, I-15.

 21 See, e.g., CR at I-16.

 22 See, e.g., CR at I-16.

 23 See, e.g., CR at III-2 at n.6.

 24 See, e.g., CR at I-16.

 25 See, e.g., Confer. Tr. at 23 (Oakley for ADM), 85 (Staloch for Cargill); CR at I-16, III-1 at n.1.

6

In the United States, citric acid, sodium citrate, and potassium citrate are produced at overlapping

manufacturing facilities by the same employees, at least for the early production stages.18 At the first

manufacturing stage, domestic producers ferment a substrate (a starch or other sugary base such as corn

starch, molasses, dextrose, and/or high fructose corn syrup) into crude citric acid using a fermenting

organism (normally a specific mold or yeast) in a deep tank.19 At the second stage, domestic producers

recover the crude citric acid produced by fermentation and refine it by one of three processes: (i) the lime

sulfuric acid method; (ii) the solvent-extraction method; or (iii) the ion-exchange method.20 All three

methods yield citric acid dissolved in water, and manufacturers produce hydrous or anhydrous citric acid

by adjusting the temperature of the crystallization process, using the same or separate equipment to do

so.21 Citric acid can be sold as is or converted into “salts” such as sodium citrate or potassium citrate.22

Whereas, of the products covered by the scope of these investigations, Tate & Lyle only produces

citric acid, both ADM and Cargill produce citric acid, sodium citrate, and potassium citrate.23 ADM and

Cargill produce sodium citrate and potassium citrate at the same plants used to produce citric acid. To

produce sodium citrate, they divert a stream of crude citric acid slurry to a reactor for reaction with

sodium hydroxide or sodium carbonate and then crystallization. Alternatively, the slurry is converted into

potassium citrate when reacted with potassium hydroxide or potassium carbonate.24 The same equipment

is used to produce both sodium citrate and potassium citrate, and petitioners report that only minimal

costs and a few hours are needed to switch the equipment from producing sodium to potassium citrate or

vice versa. The capital equipment used to convert citric acid into sodium or potassium citrate is relatively

inexpensive. Independent converters can and do produce these citrates using finished citric acid as the

input.25
 26 See, e.g., Liquid Sulfur Dioxide from Canada, Inv. No. 731-TA-1098 (Prelim.), USITC Pub. 3826 at 6 (Dec.

2005) quoting Bulk Acetylsalicylic Acid (Aspirin) from China, Inv. No. 731-TA-828 (Final), USITC Pub. 3314 at 5-

6 (June 2000); Sulfanilic Acid from Hungary and Portugal, Invs. Nos. 701-TA-426 and 731-TA-984 to 985 (Final),

USITC Pub. 3554 at 7 n.34 (Nov. 2002); Barium Carbonate from China, Inv. No. 731-TA-1020 (Prelim.), USITC

Pub. 3561 at 7 n.28 (Nov. 2002).

 27 See, e.g., Citric Acid and Certain Citrate Salts from Canada and China, Invs. Nos. 701-TA-456 and 731-TA1151 to 1152 (Prelim.), USITC Pub. 4008 at 11-12 (June 2008).

 28 See, e.g., Petitioners’ Prehearing Br. at 6.

 29 See, e.g., Softwood Lumber from Canada, Invs. Nos. 701-TA-404 and 731-TA-928 (Final), USITC Pub. 3509

at 6-15 (May 2002); Professional Electric Cutting and Sanding/Grinding Tools from Japan, Inv. No. 731-TA- 571

(Final), USITC Pub. 2658 at 8-10, 49-51 (Jul. 1993) (Commission found two like products based on operating

element – cutting tool and sanding/grinding tool – refusing to further subdivide more narrowly into 28 families of

tools); Polyethylene Terephthalate Film, Sheet, and Strip from Japan and the Republic of Korea (“PET Film”), Invs.

Nos. 731-TA-458 to 459 (Final), USITC Pub. 2383 at 8, 10 (May 1991) (“a continuum product without clear

dividing lines between the multiple like products ... {a}lthough there are many distinct end uses for different types of

PET film ... essential characteristics are common to all PET Film”).

7

C. Analysis

Crude calcium citrate is an intermediate product in the production of citric acid, and citric acid is

used to make both sodium citrate and potassium citrate. Thus, in the preliminary phase of these

investigations, the Commission considered whether there are clear lines dividing crude calcium citrate,

citric acid, sodium citrate, and potassium citrate and/or dividing different grades and/or chemical or

physical forms of these products such that there are two or more domestic like products corresponding to

the scope of these investigations.26 In its preliminary determinations, the Commission defined a single

domestic like product that included crude calcium citrate, citric acid, potassium citrate, and sodium

citrate.27 In the final phase of these investigations, no party advocated a different domestic like product.28

Based on the record evidence, we find no clear dividing lines among domestically produced

products corresponding to the scope of these investigations based on chemical or physical form, grade, or

product type.29 Whether in an intermediate form as crude calcium citrate, as citric acid, or transformed

into sodium citrate or potassium citrate, citric acid and its citrate salts come in a variety of chemical
 30 Citric acid may be produced as citric acid anhydrous (C6H8O7) or as citric acid monohydrate (C6H8O7•H2O). 

Sodium citrate may be produced in an anhydrous or trisodium anhydrous form (Na3C6H5O7), in a dihydrate or

trisodium dihydrate form (Na3C6H5O7•2H2O), and as a monosodium (NaH2(C3H5O(COO)3). Potassium citrate may

be produced as potassium citrate monohydrate or tripotassium citrate monohydrate (K3C6H5O7•H2O) and

monopotassium citrate (KH2C6H5O7). Crude calcium citrate may be produced as tricalcium citrate (Ca3(C6H5O7)2),

dicalcium citrate (Ca2H2(C3H5O)(COO)3•H2O), and tricalcium citrate tetrahydrate (Ca3(C6H5O7)2(COO)3•4H2O). 

See, e.g., Petitions, Vol. I at 6.

 31 In their dry form as odorless, translucent crystals, citric acid, sodium citrate, and potassium citrate are sold as

granular or fine granular products, with only a very small amount sold as powder. See, e.g., Confer. Tr. at 17

(Oakley for ADM). A water solution of citric acid (normally a 50-percent citric acid solution) is produced and sold

in the United States, and the solution can be reversed to a dry form. See, e.g., Petitions, Vol. I at 6; CR at V-5.

 32 In the United States, citric acid, sodium citrate, and potassium citrate must meet Food Chemical Codex

(“FCC”) standards for use in beverage and food products and U.S. Pharmacopoeia (“USP”) standards for use in

pharmaceutical products. See, e.g., CR at I-12. Non-conforming products, however, may be used in industrial

applications. See, e.g., CR at II-1.

 33 See, e.g., Petitions, Vol. I at 6.

 34 See, e.g., CR at I-11, I-16.

 35 See, e.g., CR at I-12, II-1, II-15.

 36 See, e.g., CR at I-12 to I-13, II-1, II-27, II-28.

 37 Particular end users prefer citric acid in anhydrous or monohydrate form, others prefer citric acid in solution

form due to limitations in their production processes, while other purchasers such as P&G purchase citric acid in

monohydrate, anyhdrous, and solution forms but can only use particular forms for particular plants, and others have

specific granulation requirements. See, e.g., CR at II-26 to II-30, IV-8; CR/PR at Table II-3 (summarizing

questionnaire responses regarding interchangeability among forms); Confer. Tr. at 103, 105, 141-45 (Smith for

P&G).

 38 See, e.g., CR at I-11, II-4; CR/PR at Table II-1.

 39 See, e.g., Petitioners’ Prehearing Br. at 6.

 40 See, e.g., Petitions, Vol. I at 15.

8

forms,30 physical forms,31 and grades.32 Physical appearance varies accordingly but all have similar

chemical composition.33

Crude calcium citrate is used only to produce citric acid, and some citric acid is used to produce

sodium citrate or potassium citrate.34 Although citric acid, sodium citrate, and potassium citrate are not

substitutable in all applications, they are used in an overlapping manner in some of the same types of enduse products as buffers, acidulants, and preservatives.35 There are some limitations in interchangeability

among grades (such as for use in food, beverage, or pharmaceutical applications)36 and chemical or

physical forms.37

Most domestically produced citric acid, sodium citrate, and potassium citrate is sold to end users,

although crude calcium citrate is solely consumed in the process of making citric acid.38 As for domestic

producer and customer perceptions, all domestic producers assert that citric acid, sodium citrate,

potassium citrate, and crude calcium citrate are part of the same domestic like product.39 Citric acid,

sodium citrate, and potassium citrate are treated as part of a single industry in studies such as the August

2006 Chemical Economics Handbook Marketing Research Report on Citric Acid conducted by SRI

Consulting.40 Some customers purchase more than one chemical or physical form, and others have
 41 See, e.g., CR at II-26 to II-30, IV-8; CR/PR at Table II-3 (summarizing questionnaire responses regarding

interchangeability among forms), Table II-5 (summarizing importance of various purchase factors); Confer. Tr. at

103, 105, 141-45 (Smith for P&G).

 42 See, e.g., CR at I-13 to I-16.

 43 Dry forms are typically packaged in 50-pound or 25-kilogram polyethylene lined bags or in super sack bags

typically containing 500 to 2,000 pounds. Citric acid sold in solution form is not packaged, but is instead shipped in

200- to 275-pound drums, or in rail cars or tank trucks. See, e.g., CR at I-16.

 44 Fine granular citric acid is priced somewhat higher than granular citric acid, and citric acid is somewhat higher

priced than sodium citrate but somewhat lower priced than potassium citrate. See, e.g., Confidential Staff Report

from Preliminary Phase, Mem. INV-FF-060 at Table V-1 (granular), Table V-2 (fine granular) (May 22, 2008);

USITC Pub. 4008 at Table V-1 (granular), Table V-2 (fine granular); CR/PR at Table III-1. CR/PR at Tables V-4 to

V-8. Citric acid sold in an industrial-grade solution that is 50 percent citric acid and 50 percent water is usually

priced at about 50 percent of the equivalent dry price. See, e.g., CR at V-5. Anyhdrous citric acid costs about nine

percent more than the monohydrate form due to the presence of nine percent water in the monohydrate version. See,

e.g., CR at V-5.

 45 For convenience, we use the term “citric acid and certain citrate salts” hereinafter to refer to the collective

grouping of citric acid (crude and finished), sodium citrate, and potassium citrate.

 46 19 U.S.C. § 1677(4)(A).

 47 See, e.g., CR at III-1. Although no party made any related party arguments in the preliminary or final phase of

these investigations, the record indicates that domestic producer *** imported subject merchandise from ***. See,

e.g., CR/PR at Table III-4. As such, *** is a related party. We do not, however, find appropriate circumstances

exist to exclude *** from the domestic industry. The company imported *** dry pounds of subject merchandise

from ***. See, e.g., CR at III-6 n.8; CR/PR at Table III-4. In the preliminary phase of these investigations, ***

reported that it ***. See, e.g., Mem. INV-FF-060 at Table III-4 n.1; USITC Pub. 4008 at Table III-4 n.1. ***

imports from *** were relatively small, equivalent to *** percent of the subject merchandise imported from *** or

*** percent of *** U.S. production ***. See, e.g., CR/PR at Table III-4, Table C-1. Its imports of subject

merchandise were ***. See, e.g., CR/PR at Table III-4. For all of these reasons, we do not find appropriate

(continued...)

9

handling requirements developed over time but could switch between chemical or physical forms or

grades in some situations.41

In the United States, citric acid, sodium citrate, and potassium citrate are produced at overlapping

manufacturing facilities by the same employees, at least for the early production stages.42 There are

differences in how the dry and solution forms are packaged.43 There are also some differences in price

based on the chemical and physical form and grade.44

In light of these facts and in the absence of any contrary arguments, for purposes of the final

phase of these investigations, we define one domestic like product consisting of citric acid (whether in

crude form as crude calcium citrate or in finished form), sodium citrate, and potassium citrate in all

chemical and physical forms and grades.45

III. DOMESTIC INDUSTRY

The domestic industry is defined as the domestic “producers as a whole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”46 In defining the domestic industry, the

Commission’s general practice has been to include in the industry all producers of the domestic like

product, whether toll-produced, captively consumed, or sold in the domestic merchant market.

Consistent with our definition of the domestic like product, we define the domestic industry as

consisting of all domestic producers of citric acid and citrate salts (i.e., ADM, Cargill, and Tate & Lyle).47
 47 (...continued)

circumstances exist to exclude *** from the domestic industry as a related party.

 48 Before reaching the issue of whether subject imports from Canada and China are negligible, the Commission

must first decide which data to use to measure subject and non-subject imports into the U.S. market.

In the preliminary phase of these investigations, the Commission measured the volume of subject imports

from Canada using importer questionnaire responses in response to respondents’ concern that official Census data on

imports of citric acid in solution form from Canada reflected the weight of citric acid in solution rather than the

anhydrous equivalent weight reported in the questionnaires. See, e.g., USITC Pub. 4008 at 14. In the final phase of

these investigations, absent contrary party arguments, we again measure imports from Canada using importer

questionnaire responses. See, e.g., CR at I-4.

With respect to imports from China, in the preliminary phase of these investigations, respondents reported

that at least some of the imports from China consisted of product in monohydrate form, and they were uncertain

whether the Census data reflected the monohydrate dry form or the anhydrous equivalent weight. See, e.g., Confer.

Tr. at 128-31 (Lafave for P&G, Porter for Chinese Respondents). Petitioners argued that any imports of

monohydrate form from China were limited and asked the Commission to measure imports from China using Census

data rather than importer questionnaire responses that they contended under-reported imports from China. See, e.g.,

Petitioners’ Postconf. Br. at 23-24, Exh. 1 at 4-5. The questionnaire data appear to understate subject imports from

China, but any overstatement of subject imports from China by official import statistics appears to be limited due to

the minimal portion of imports from China consisting of monohydrate form. See, e.g., CR at VII-5 at n.5; CR/PR at

Table IV-1, Table VII-2, Table C-1. Thus, absent contrary party arguments, in the final phase of these investigations

we again measure imports from China using official import statistics. See, e.g., CR at I-4, IV-1 at n.4.

Similarly, importer questionnaire responses appear to understate imports from non-subject countries

compared to official import statistics. We again measure imports from non-subject countries using official import

statistics and note that any overstatement due to imports of monohydrate form appears to be minimal, since

questionnaire respondents reported only limited imports of monohydrate form from non-subject countries. See, e.g.,

CR/PR at Table IV-1 (questionnaire data on non-subject imports), Table C-1 (official statistics on non-subject

imports); CR at IV-1 at n.4.

Based on these data, subject imports are not “negligible” within the meaning of 19 U.S.C. § 1677(24). 

Subject imports from Canada and China were well above three percent of total imports for the most recent 12-month

period preceding the April 14, 2008, filing of the petitions for which data are available (January through December

2007). Subject imports from Canada accounted for *** percent, and subject imports from China accounted for ***

percent, of total imports of citric acid and certain citrate salts in that period. See, e.g., CR at IV-12.

 49 19 U.S.C. § 1677(7)(G)(i).

 50 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required, and she notes that this factor would be better described

(continued...)

10

IV. CUMULATION48

A. Legal Framework

For purposes of evaluating the volume and price effects for a determination of material injury by

reason of the subject imports, section 771(7)(G)(I) of the Act requires the Commission to cumulate

subject imports from all countries as to which petitions were filed and/or investigations self-initiated by

Commerce on the same day, if such imports compete with each other and the domestic like product in the

U.S. market.49 In assessing whether subject imports compete with each other and with the domestic like

product, the Commission has generally considered four factors, including the following:

(1) the degree of fungibility between the subject imports from different countries and

between imports and the domestic like product, including consideration of specific

customer requirements and other quality-related questions;50
 50 (...continued)

as an analysis of whether subject imports from each country and the domestic like product could be substituted for

each other. See Separate Views of Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from

China, Germany, and Korea, Invs. Nos. 701-TA-451 and 731-TA-1126 to 1128 (Prelim.), USITC Pub. 3964 (Nov.

2007).

 51 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. Nos. 731-TA-278 to

280 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int’l

Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988).

 52 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989).

 53 The SAA states that “the new section will not affect current Commission practice under which the statutory

requirement is satisfied if there is a reasonable overlap of competition.” SAA at 848 (citing Fundicao Tupy, S.A. v.

United States, 678 F. Supp. 898, 902 (Ct. Int’l Trade 1988), aff’d, 859 F.2d 915 (Fed. Cir. 1988)); see also, e.g.,

Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082, 1087 (Ct. Int’l Trade 1998) (“cumulation does not

require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping

markets are not required.”).

 54 Petitioners argue that the Commission should cumulate subject imports from Canada and China because there

is a reasonable overlap of competition among these imports and the domestic like product. See, e.g., Petitioners’

Postconf. Br. at 2-3, 6-15; Petitioners’ Prehearing Br. at 6-10, 40-44; Petitioners’ Posthearing Br. at Exh. 1 at 19-29,

Exh. 2 at 13-15, Exh. 3 at 40-42. JBL Canada and purchaser P&G argue that the Commission should not cumulate

subject imports from Canada and China based on what they assert are differences in fungibility, channels of

distribution, simultaneous presence, and other differences that limit competition. See, e.g., P&G’s Postconf. Br. at 4,

25-30; P&G’s Prehearing Br. at 64-70; JBL’s Postconf. Br. at 2, 9, 10; Confer. Tr. at 12 (Waite for JBL), 162-64,

166-67 (Waite); JBL’s Prehearing Br. at 20-29. Chinese Respondents argued against cumulation in the preliminary

phase of these investigations; in the final phase, they contend that they have no basis to argue against cumulation for

purposes of the Commission’s present material injury or threat of material injury determinations. See, e.g., Confer.

Tr. at 14-15 (Porter), 152-53; Chinese Respondents’ Postconf. Br. at 2, 6-13; Hearing Tr. at 256 (Cameron); Chinese

Respondents’ Posthearing Br. at Exh. A at 24-25.

 55 We note that JBL Canada also asserts that differences in *** are another reason not to cumulate subject

imports from Canada and China. While data obtained in investigating *** relates to causation issues more than the

cumulation issue of whether there is a “reasonable overlap of competition.” See Fundicao Tupy, 678 F. Supp. at 902

(“the operation of the cumulation provision does not involve a specific causation finding with respect to each

(continued...)

11

(2) the presence of sales or offers to sell in the same geographic markets of subject

imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.51

While no single factor is necessarily determinative, and the list of factors is not exclusive, these factors

are intended to provide the Commission with a framework for determining whether the subject imports

compete with each other and with the domestic like product.52 Only a “reasonable overlap” of

competition is required.53 Subject imports from Canada and China are eligible for cumulation because the

petitions concerning these subject countries were filed on the same day and none of the statutory

exceptions to cumulation applies.

B. Analysis

We now examine whether there is a reasonable overlap of competition among the domestic like

product, subject imports from Canada, and subject imports from China.54 55
 55 (...continued)

country ... .”); USX Corp. v. United States, 682 F. Supp. 60, 73 (Ct. Int’l Trade 1988) (“a decision to cumulate

cannot be predicated on a determination that imports from a particular source are by themselves a cause of material

injury.”); Bingham & Taylor Division, Virginia Industries v. United States, 627 F. Supp. 793, 796 (Ct. Int’l Trade

1986) (“Congress broadly required cumulation of the injurious effects of ‘simultaneous unfair acts or practice’ if

certain conditions are met. Congress’ rejection of the concept of ‘contributing effect’ underscores its intent that

cumulation be broadly applied, even where the impact of unfairly traded imports from one source may be minimal,

‘but the combined impact is injurious.’”).

 56 See, e.g., CR/PR at Table V-4 to Table V-6, Table C-2.

 57 Compare, e.g., CR/PR at Table C-2 (citric acid) with, e.g., CR/PR at Table C-1 (citric acid and certain citrate

salts).

 58 JBL Canada does not produce sodium citrate or potassium citrate, but the domestic industry and Chinese

producers both sold sodium citrate and potassium citrate in the U.S. market. See, e.g., CR at VII-2; CR/PR at Table

V-7 (sodium citrate), Table V-8 (potassium citrate).

 59 See, e.g., CR at I-12, II-1, II-15.

 60 See, e.g., CR at IV-7 & n.12 (indicating that *** percent of JBL Canada’s U.S. shipments in 2008 were in

anhydrous form compared to *** percent for ADM, *** percent for Cargill, and *** percent for Tate & Lyle); CR at

IV-1 at n.4 (imports in anhydrous form account for approximately *** percent of subject imports from China

according to questionnaire responses).

 61 The relatively limited volume of subject imports of citric acid in monohydrate form from China competes in a

more limited fashion with subject imports from Canada and the domestic like product. Imports of citric acid in

monohydrate form accounted for a small percentage (***) percent of subject imports from China. See, e.g., CR at

IV-1 at n.4. The domestic industry and the Canadian producer do not supply citric acid in monohydrate form,

although the domestic industry says it could supply monohydrate form to the few customers that want it. See, e.g.,

CR at IV-7; Confer. Tr. at 67 (Christiansen for Cargill), 89-90 (Oakley for ADM, Staloch for Cargill, Ellis for

Petitioners), 103-05 (Smith for P&G), 116 (Waite for JBL); JBL’s Postconf. Br. at 11 n.42; Petitioners’ Posthearing

Br. at Exh. 6. Petitioners also caution that it would be easy to use citric acid in monohydrate form for a wide range

of applications, so the limited current use of monohydrate does not mean that it could not be substituted in a far

greater amount in applications and end uses currently using citric acid in anhydrous or solution form. See, e.g.,

Confer. Tr. at 90 (Anderson for Petitioners); Petitioners’ Posthearing Br. at Exh. 6 at 1-3; CR at I-16 at n.61.

12

1. Fungibility

There is considerable overlap in the chemical forms supplied to the U.S. market by the domestic

industry and producers in the subject countries, despite some differences. The domestic industry and

subject producers in both Canada and China supplied large quantities of citric acid to the U.S. market

throughout the period of investigation.56 Citric acid accounts for the vast majority of sales of citric acid

and certain citrate salts whereas sodium citrate and potassium citrate account for a small share of the U.S.

market.57 With respect to the sales of the more limited quantities of sodium citrate and potassium citrate,

overlap was more limited.58 Although there are some applications or end uses where sodium citrate or

potassium citrate are preferred, there are a number of applications and end uses where citric acid could be

used instead of sodium citrate or potassium citrate.59

In terms of physical form, the domestic industry, the subject producer in Canada, and subject

producers in China all at least predominantly supplied anhydrous citric acid to the U.S. market during the

period of investigation.60 Direct overlap for sales of citric acid in monohydrate and solution forms was

more limited. Unlike producers in Canada and the United States, Chinese producers supply limited

quantities of citric acid in monohydrate form to the U.S. market,61 and do not supply citric acid in solution
 62 See, e.g., CR at IV-7 (indicating that *** U.S. importers reported importing subject product in solution form

from China in 2008).

 63 See, e.g., CR at IV-7 & nn.11-12 (indicating that *** percent of JBL Canada’s U.S. imports were in solution

form in 2008 compared to *** percent for ADM, *** percent for Cargill, and *** percent for Tate & Lyle); CR/PR

at Table V-6 (pricing data for citric acid in solution form).

 64 See, e.g., CR at I-10, II-27 to II-30, II-32 to II-34; CR/PR at Table II-3, Table II-5, Table II-8. There appears

to be some overlap among the domestic like product and subject imports from China and Canada for sales to P&G

for detergent applications, notwithstanding differences in the forms of citric acid supplied from these sources to the

U.S. market. See, e.g., Confer. Tr. at 103-05 (Smith), 142-44 (Smith); P&G’s Postconf. Br. at 28-29.

 65 See, e.g., Petitioners’ Posthearing Br. at 8; CR at II-1, II-11, II-27, II-32 to II-37; CR/PR at Table II-2, Table

II-8, Table IV-3.

 66 See, e.g., CR at II-25 to II-37. U.S. and Canadian products are made from genetically modified organisms

(“GMO”) whereas Chinese products are not, but the portion of the U.S. market that requires non-GMO products is

small. See, e.g., Petitioners’ Posthearing Br. at Exh. 1 at 26-27, Exh. 4 at 18; JBL’s Posthearing Br. at Exh. 8

(estimating that it accounts for less than *** percent of the U.S. market and that the world-wide range is *** to ***

percent).

 67 See, e.g., CR/PR at Table II-6.

 68 See, e.g., CR at II-28 to II-30; PepsiCo’s Prehearing Br. at 12-13.

 69 See, e.g., CR/PR at Table II-3, Table IV-3; Petitioners’ Posthearing Br. at Exh. 3 at 1-2.

 70 Based on data reported by questionnaire respondents on their 2008 U.S. shipments by end-use market

segment, which understate U.S. shipments of subject merchandise from China, *** percent of all U.S. shipments of

citric acid and certain citrate salts were for food and beverage applications (*** percent for soft drinks); *** percent

were for industrial applications (*** percent for household detergents and cleaners); *** percent were for

pharmaceutical applications (*** percent for beauty and oral hygiene/cosmetics); and *** percent were for all other

or unknown applications. (Derived from CR/PR at Table IV-3). These data are consistent with data in ***, which

reported that U.S. consumption of citric acid and citrate salts in 2005 fell into four major categories: food and

beverages (*** percent); household detergent and cleaners (*** percent); pharmaceuticals (*** percent); and

industrial or other (*** percent). See, e.g., CR at II-15.

13

due to the transportation costs associated with ocean shipment.62 Due to its geographical proximity to

U.S. customers, JBL Canada does supply citric acid in solution form to the U.S. market in rail cars and

thus competes with the domestic industry in that respect.63 Although some end users prefer to use citric

acid in monohydrate, anhydrous, or in solution form due to constraints in their production facilities and/or

production processes, they may be able to convert the dry forms into solution, or have third parties do the

conversion for them.64

We also considered quality and other non-price differences among the three sources. Producers

in the United States, Canada, and China manufacture citric acid and certain citrate salts that meet quality

requirements for sale as FCC/USP products.65 Although questionnaire respondents reported some nonprice differences such as product quality among sources,66 the vast majority reported that subject imports

from Canada and China are at least frequently if not always interchangeable with one another and with

the domestic like product.67 Although caking was reported more frequently as a problem for subject

imports from China,68 Chinese product was nevertheless sold in substantial quantities even to the highly

demanding soft drink sector, as discussed below.69

We also examined whether products produced in the United States, Canada, and China were sold

for overlapping end-use applications. The largest end-use segment of the U.S. market is food and

beverage applications (particularly for soft drink beverages), followed by industrial applications

(particularly for household detergents and cleaners) and pharmaceutical applications (including for beauty

and oral hygiene/cosmetics).70 The record in the final phase of these investigations shows that U.S.,
 71 See, e.g., CR/PR at Table IV-3, reflecting the following overlap: Food and beverage – *** percent of the

domestic industry’s U.S. shipments in 2008 were to the food and beverage market segment (*** percent for soft

drinks and *** percent for food) as compared to *** percent of U.S. shipments of subject imports from Canada (***

percent for soft drinks and *** percent for food) and *** percent of reported U.S. shipments of subject imports from

China (*** percent for soft drinks and *** percent for food); Industrial – *** percent of the domestic industry’s U.S.

shipments in 2008 (*** percent for household detergents and cleaners), as compared to *** percent of U.S.

shipments of subject imports from Canada (*** percent for household detergents and cleaners), and *** percent of

reported U.S. shipments of subject imports from China (*** percent for household detergents and cleaners);

Pharmaceutical – *** percent of the domestic industry’s U.S. shipments in 2008 as compared to *** percent of U.S.

shipments of subject imports from Canada and *** percent of reported U.S. shipments of subject imports from

China. Petitioners note that ***. See, e.g., Petitioners’ Prehearing Br. at 35; Petitioners’ Posthearing Br. at Exh. 1 at

20-21, Exh. 2 at 13-14, Exh. 4 at 19.

 72 See, e.g., CR/PR at Table IV-3.

 73 See, e.g., CR/PR at Table II-2 (reporting, inter alia, that during the period of investigation *** purchased

products made in the United States, Canada, and China, as did ***). The top purchasers of citric acid and certain

citrate salts during the period of investigation were ***, each of which reported purchasing more than *** pounds

during that period. *** pounds. See, e.g., CR at II-3 to II-5; see also, e.g., Petitioners’ Prehearing Br. at Exh. 8;

Petitioners’ Posthearing Br. at Exh. 21 (showing sales of domestically produced products to purchasers of a wide

range of sizes). Thus, the record refutes Chinese Respondents’ argument in the preliminary phase of these

investigations that subject imports from China predominantly served the smaller “mom and pop” establishments in

the United States that domestic producers do not bother or declined to serve. See, e.g., Confer. Tr. at 112-14 (Hsu

for United Food Corp.); Chinese Respondents’ Postconf. Br. at 3, 10-13.

 74 See, e.g., CR at II-2.

 75 See, e.g., CR at II-2, IV-11.

 76 See, e.g., CR at IV-11; JBL’s Postconf. Br. at 11.

14

Canadian, and Chinese products were sold for overlapping end uses.71 The only area with no reported

overlap was for sales in a *** end-use category that accounted for about *** percent of total reported

U.S. shipments in 2008 (***), where there were sales of products from ***.72 Indeed, products produced

in the United States, Canada, and China were sold to some of the same customers during the period of

investigation.73

In short, although there are some differences in terms of the chemical and physical forms and

grades sold by domestic, Canadian, and Chinese producers in the U.S. market, there is also considerable

overlap, particularly for anhydrous citric acid. Moreover, all three sources competed for sales of food,

beverage, pharmaceutical, and industrial-grade products, including for soft-drink applications, and even to

some of the same customers. Thus, the record in the final phase of these investigations supports a finding

that U.S., Canadian, and Chinese products are fungible with one another.

2. Overlapping Geographical Markets

Petitioners sell citric acid and certain citrate salt products nationwide.74 Imports of subject

merchandise from China entered multiple U.S. ports of entry and dispersed across the nation.75 Although

Canadian-produced citric acid is imported primarily through Buffalo and Detroit due to the location of

JBL Canada’s production facility, it is transported by truck or rail and competes nationwide with products

produced in the United States and China.76 Thus, we find that the U.S., Canadian, and Chinese products

are sold in overlapping geographical markets.
 77 See, e.g., CR/PR at Table II-1 (showing that for all U.S. shipments between 2006 and 2008, the portion of the

domestic industry’s shipments sent to distributors was *** percent in 2006, *** percent in 2007, and *** percent in

2008 whereas the portion of the Canadian imports’ shipments sent to distributors was *** percent in 2006, ***

percent in 2007, and *** percent in 2008 and the portion of the Chinese imports’ shipments sent to distributors was

*** percent in 2006, *** percent in 2007, and *** percent in 2008). According to the pricing data, U.S. shipments

of citric acid products to distributors in 2008 were only somewhat higher for products manufactured in Canada (***

percent) and China (14.0) percent than in the United States (5.0 percent). See, e.g., CR at II-3. Sales of citrate salts

tended to be somewhat less concentrated in sales to end users and somewhat more concentrated in sales to

distributors. Based on the pricing data, the domestic industry sold *** percent of its citrate salts to end users and

*** percent to distributors whereas 76.9 percent of subject imports from China were sold to end users and 23.1

percent were sold to distributors. There were no U.S. sales of citrate salts made in Canada because JBL Canada does

not produce citrate salts. See, e.g., CR at II-3.

 78 See, e.g., CR at IV-11; CR/PR at Tables V-4 to V-8.

 79 Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun find that an industry in the United States

is neither materially injured nor threatened with material injury by reason of subject imports from Canada and China. 

Except as otherwise noted, they join the discussion and analysis in sections V.A and V.B and provide the remainder

of their analysis in separate views. See Separate and Dissenting Views of Chairman Shara L. Aranoff, Vice

Chairman Daniel R. Pearson, and Commissioner Deanna Tanner Okun.

 80 19 U.S.C. §§ 1671d(b), 1673d(b).

15

3. Channels of Distribution

Citric acid products manufactured in the United States, Canada, and China were sold

predominantly to end users but also to distributors.77 Because products produced in the United States,

Canada, and China are sold to end users and distributors and, as noted above, even to some of the same

end users and distributors, we find an overlap in the channels of distribution for subject imports from

Canada and China and the domestic like product.

4. Simultaneous Presence

U.S., Canadian, and Chinese products were each present in the U.S. market in every month of the

period of investigation.78 Thus, we find that this criterion is also met.

C. Conclusion

For the reasons discussed above, we conclude that there is a reasonable overlap of competition

between subject imports from Canada and China and between subject imports and the domestic like

product. We therefore cumulatively assess the volume and effects of subject imports from Canada and

China for our analysis of present material injury by reason of subject imports.

V. MATERIAL INJURY BY REASON OF CUMULATED SUBJECT IMPORTS79

A. Legal Standards

In the final phase of antidumping and countervailing duty investigations, the Commission

determines whether an industry in the United States is materially injured or threatened with material

injury by reason of the imports under investigation.80 In making this determination, the Commission must

consider the volume of subject imports, their effect on prices for the domestic like product, and their

impact on domestic producers of the domestic like product, but only in the context of U.S. production
 81 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to the

determination” but shall “identify each {such} factor ... and explain in full its relevance to the determination.” 

19 U.S.C. § 1677(7)(B).

 82 19 U.S.C. § 1677(7)(A).

 83 19 U.S.C. § 1677(7)(C)(iii).

 84 19 U.S.C. § 1677(7)(C)(iii).

 85 19 U.S.C. §§ 1671d(a), 1673d(a).

 86 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute does not

‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943, 951 (Ct. Int’l Trade

1996).

 87 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects

are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation

requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in

Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting

Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in

the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or

tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States,

458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed.

Cir. 2001).

 88 Statement of Administrative Action (“SAA”) on Uruguay Round Agreements Act (“URAA”), H.R. Rep. 103-

316, Vol. I at 851-52 (1994) (“{T}he Commission must examine other factors to ensure that it is not attributing

injury from other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979) (the Commission “will consider

information which indicates that harm is caused by factors other than less-than-fair-value imports.”); H.R. Rep. 96-

317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into

account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or

dumped imports is attributable to such other factors;” those factors include “the volume and prices of nonsubsidized

(continued...)

16

operations.81 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”82 In assessing whether the domestic industry is materially injured by reason of subject

imports, we consider all relevant economic factors that bear on the state of the industry in the United

States.83 No single factor is dispositive, and all relevant factors are considered “within the context of the

business cycle and conditions of competition that are distinctive to the affected industry.”84

Although the statute requires the Commission to determine whether the domestic industry is

“materially injured by reason of” unfairly traded imports,85 it does not define the phrase “by reason of,”

indicating that this aspect of the injury analysis is left to the Commission’s reasonable exercise of its

discretion.86 In identifying a causal link, if any, between subject imports and material injury to the

domestic industry, the Commission examines the facts of record that relate to the significance of the

volume and price effects of the subject imports and any impact of those imports on the condition of the

domestic industry. This evaluation under the “by reason of” standard must ensure that subject imports are

more than a minimal or tangential cause of injury and that there is a sufficient causal, not merely a

temporal, nexus between subject imports and material injury.87

In many investigations, there are other economic factors at work, some or all of which may also

be having adverse effects on the domestic industry. Such economic factors might include non-subject

imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or

management decisions by domestic producers. The legislative history explains that the Commission must

examine factors other than subject imports to ensure that it is not attributing injury from other factors to

the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the

statutory material injury threshold.88 In performing its examination, however, the Commission need not
 88 (...continued)

imports or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive

practices of and competition between the foreign and domestic producers, developments in technology and the

export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877.

 89 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by

unfair imports.”); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001) (“{T}he

Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the

Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject

imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180

F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject

imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of subject

imports and other causes.); see also Softwood Lumber from Canada, Invs. Nos. 701-TA-414 and 731-TA-928

(Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is

found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’

then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, Inc. v. United States,

132 F.3d 716, 722 (Fed. Cir. 1997) (the statute “does not suggest that an importer of LTFV goods can escape

countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the

harmful effects on domestic market prices.”).

 90 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47.

 91 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under the statute

requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of

injury.”).

 92 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative

determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the

Commission is not required to follow a single methodology for making that determination ... {and has} broad

discretion with respect to its choice of methodology.”) citing United States Steel Group v. United States, 96 F.3d

1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75.

 93 Commissioner Pinkert does not join this paragraph or the following four paragraphs. He points out that the

Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal, held that the Commission is required, in certain circumstances,

to undertake a particular kind of analysis of non-subject imports. Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price-competitive, nonsubject imports are in the market,” the Commission would not fulfill its obligation to consider an important

aspect of the problem if it failed to consider whether non-subject or non-LTFV imports would have

replaced LTFV subject imports during the period of investigation without a continuing benefit to the

domestic industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the Commission to

consider whether replacement of the LTFV subject imports might have occurred during the period of

investigation, and it requires the Commission to provide an explanation of its conclusion with respect to

that factor.

542 F.3d at 878.

17

isolate the injury caused by other factors from injury caused by unfairly traded imports.89 Nor does the

“by reason of” standard require that unfairly traded imports be the “principal” cause of injury or

contemplate that injury from unfairly traded imports be weighed against other factors, such as non-subject

imports, which may be contributing to overall injury to an industry.90 It is clear that the existence of

injury caused by other factors does not compel a negative determination.91

Assessment of whether material injury to the domestic industry is “by reason of” subject imports

“does not require the Commission to address the causation issue in any particular way” as long as “the

injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission

“ensure{s} that it is not attributing injury from other sources to the subject imports.”92 93 Indeed, the
 94 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at

879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic

injury was ‘by reason’ of subject imports.”).

 95 Mittal Steel, 542 F.3d at 875-79.

 96 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2 (recognizing the

Commission’s alternative interpretation of Bratsk as a reminder to conduct a non-attribution analysis).

 97 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip

from Brazil, China, Thailand, and the United Arab Emirates, Invs. Nos. 731-TA-1131 to 1134 (Final), USITC Pub.

4040 (Oct. 2008), for further discussion of Mittal Steel.

 98 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to present published

information or send out information requests in final phase investigations to producers in non-subject countries that

accounted for substantial shares of U.S. imports of subject merchandise (if, in fact, there were large non-subject

import suppliers). In order to provide a more complete record for the Commission’s causation analysis, these

requests typically seek information on capacity, production, and shipments of the product under investigation in the

major source countries that export to the United States. The Commission plans to continue utilizing published or

requested information in final phase investigations in which there are substantial levels of non-subject imports.

 99 We provide in our respective discussions of volume, price effects, and impact a full analysis of other factors

alleged to have caused any material injury experienced by the domestic industry.

 100 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357;

S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a

matter for the judgment of the ITC.”).

18

Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid

adherence to a specific formula.”94

The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases

where the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive non-subject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as

requiring it to apply a particular additional methodology following its finding of material injury in cases

involving commodity products and a significant market presence of price-competitive non-subject

imports.95 The additional “replacement/benefit” test looked at whether non-subject imports might have

replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific

additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad

and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear

that the Federal Circuit does not require the Commission to apply an additional test nor any one specific

methodology; instead, the court requires the Commission to have “evidence in the record” to “show that

the harm occurred ‘by reason of’ the LTFV imports,” and requires that the Commission not attribute

injury from non-subject imports or other factors to subject imports.96 Accordingly, we do not consider

ourselves required to apply the replacement/benefit test that was included in Commission opinions

subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving

commodity products where price-competitive non-subject imports are a significant factor in the U.S.

market, the Court will require the Commission to give full consideration, with adequate explanation, to

non-attribution issues when it performs its causation analysis.97 98

The question of whether the material injury threshold for subject imports is satisfied

notwithstanding any injury from other factors is factual, subject to review under the substantial evidence

standard.99 Congress has delegated this factual finding to the Commission because of the agency’s

institutional expertise in resolving injury issues.100
 101 See, e.g., CR at II-14 to II-20.

 102 See, e.g., CR at II-15; CR/PR at Table IV-3.

 103 See, e.g., CR at II-22.

 104 See, e.g., CR at II-21 to II-22.

 105 See, e.g., CR/PR at Table C-1.

 106 See, e.g., CR/PR at Table C-1.

 107 See, e.g., CR at II-16 to II-18.

 108 See, e.g., CR at II-17. The record reflected increased use of citric acid in laundry detergents to replace

phosphate-based formulations and because of sales growth for ultra-concentrated liquid detergents, which contain

more citric acid than powdered detergents. Others reported increased demand for potassium citrate due to increased

demand for low-sodium food and beverages. See, e.g., CR at II-17. Other questionnaire respondents reported the

potential for increased demand for citric acid and certain citrate salts to replace phthalate plasticizers and to replace

Portland cement with green cement. See, e.g., CR at II-17 to II-18. ***. See, e.g., CR at II-18.

 109 See, e.g., CR/PR at Table II-1; CR at II-3.

 110 See, e.g., CR at II-3.

19

B. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is material injury or

threat of material injury by reason of subject imports from Canada and China.

1. Demand Conditions

Demand for citric acid and certain citrate salts is derived from the demand for the products in

which they are ultimately incorporated.101 As discussed above, the largest end-use segment of the U.S.

market is food and beverage applications (particularly for soft drink beverages), followed by industrial

applications (particularly for household detergents and cleaners) and pharmaceutical applications

(including for beauty and oral hygiene/cosmetics).102 Citric acid and certain citrate salts account for a

relatively low share of the cost of the products in which they are used.103 There are relatively few

substitutes for citric acid and certain citrate salts.104

The demand for citric acid and certain citrate salts in the United States was strong and grew by

approximately *** percent between 2006 and 2008.105 During the period of investigation, demand, as

measured by total apparent U.S. consumption (the sum of the domestic industry’s U.S. shipments and

imports from subject and non-subject countries of citric acid and certain citrate salts) increased from ***

dry pounds in 2006 to *** dry pounds in 2007 and *** dry pounds in 2008.106

Questionnaire respondents generally agreed that demand for citric acid and certain citrate salts

increased during the period of investigation.107 Reasons for the increased demand included economic

growth; citric acid’s relatively low cost; reformulation of downstream products to increase use of citric

acid; increased use in detergents; sodium-reduction initiatives; new products; and increased demand for

the end-use products in which citric acid and certain citrate salts are used.108

Products manufactured in the United States and imported from Canada and China were all sold

more frequently to end users than to distributors, although domestic producers shipped a somewhat higher

share of their products to end users than did importers.109 Nonetheless, some of the largest distributors of

domestically produced products are also importers of Chinese products.110
 111 See, e.g., Petitioners’ Prehearing Br. at 25-27, 37-38, Exh. 8; Petitioners’ Posthearing Br. at Exh. 1 at 21, Exh.

2 at 15-17, 26-32, 38-39, Exh. 3 at 7-10, Exh. 21; JBL’s Posthearing Br. at Exh. 7; Hearing Tr. at 269 (Cameron);

Confer. Tr. at 112-14 (Hsu). Sixty-nine purchasers responded to the Commission’s purchaser questionnaires, of

which 41 were end users and 28 were distributors. See, e.g., CR at II-3 to II-5.

 112 See, e.g., CR at II-2.

 113 See, e.g., CR at II-2; CR/PR at Tables II-2 and IV-5.

 114 See, e.g., CR at II-4 to II-5; CR/PR at Table II-2.

 115 See, e.g., CR at II-4.

 116 See, e.g., CR at II-16. Fifty-three of 68 responding purchasers reported that the quantity of their purchases

varied over the course of a year. See, e.g., CR at II-16. Twenty-five of these purchasers reported that seasonality

accounted for these variations. See, e.g., CR at II-16. Other factors noted were sourcing customer requirements,

product demand, price, and availability. See, e.g., CR at II-16.

 117 (derived from CR/PR at Table IV-3).

 118 See, e.g., CR at II-28 to II-30.

 119 See, e.g., CR at V-11. According to the pricing data for pricing products 1 to 3, the domestic industry made

*** percent of its sales pursuant to contracts compared to *** percent of its sales pursuant to spot sales. (derived

from CR/PR at Tables V-4 to V-6).

 120 See, e.g., CR at V-6.

 121 Cargill reported selling *** percent of its citric acid and citrate salt products on long-term contracts, Tate &

Lyle *** percent, and ADM *** percent on long-term contracts. JBL Canada reported selling *** percent of its

products using long-term contracts. Seven importers of Chinese product reported using long-term contracts; five of

these reported selling half or more of their products using long-term contracts. See, e.g., CR at V-7.

20

The parties agree that purchasers of citric acid and certain citrate salts number in the hundreds but

that the top purchasers account for a substantial portion of total purchases.111 The five largest purchasers

that provided questionnaire responses accounted for 48.3 percent of apparent U.S. consumption between

2006 and 2008.112 The 12 largest purchasers accounted for 98.7 percent of purchases reported by

purchasers in these investigations and 66.9 percent of apparent U.S. consumption between 2006 and

2008.113 The top purchasers based on quantities purchased are ***, each of which reported purchasing

more than *** pounds during the period of investigation. *** dry pounds, respectively.114 All other

purchasers reported purchasing less than *** pounds of citric acid and citrate salts during the three-year

period from 2006 to 2008.115

Demand by beverage manufacturers peaks between April and August of each year.116 Sales to

beverage manufacturers accounted for over one-quarter of combined U.S. shipments of products produced

in the United States, Canada, and China.117 Respondents and some responding purchasers asserted that

due to limitations in their manufacturing equipment, beverage manufacturers, particularly soft-drink

manufacturers, required anhydrous citric acid that did not “cake” or clog their machinery.118

Domestic producers report contracting for a large portion of their sales in the final quarter of each

year for shipments the following year; Cargill estimated that domestic producers contract for

approximately 80 percent of their output in November and December each year to a few very large

purchasers.119 Responding purchasers generally agreed that long-term contracts, which are typically 12

months in duration in this industry, are common.120 Although there were differences in the percentage of

sales made under long-term contracts, a large portion of sales by the domestic industry, JBL Canada, and

importers of Chinese product were made through long-term contracts.121
 122 See, e.g., CR at V-12.

 123 See, e.g., CR at V-12.

 124 See, e.g., CR at V-12.

 125 See, e.g., CR at V-12.

 126 See, e.g., CR at V-12. Eleven importers of Chinese products reported using short-term contracts, with three

of these reporting that 60 to 100 percent of their sales were made using short-term contracts and eight firms reporting

that 10 to 40 percent of their sales were made using short-term contracts. The duration for short-term contracts

ranged from 1 to 9 months. See, e.g., CR at V-12.

 127 See, e.g., CR at V-13. Between 2006 and 2008, the percentages of spot sales made by ADM, Cargill, and

Tate & Lyle were ***, ***, and *** percent, respectively. See, e.g., CR at V-13. JBL Canada reported selling ***

percent of the Canadian product on a spot basis. Six of the 16 importers of Chinese product reported selling all citric

acid and certain citrate salts on a spot basis, four reported that spot sales accounted for 10 to 40 percent of sales, five

reported these were 60 to 80 percent of sales, and one indicated that spot sales accounted for 85 percent of its total

sales. See, e.g., CR at V-13.

 128 See, e.g., CR/PR at Table C-1.

 129 See, e.g., CR/PR at Table C-1.

 130 See, e.g., CR/PR at Table C-1.

 131 See, e.g., Petitions, Vol. I at 2; CR at III-4 at n.6. Petitioners ADM, Cargill, and Tate & Lyle each submitted

producer questionnaire responses, so domestic industry data reflect 100 percent of the domestic industry’s

production. See, e.g., CR at III-1.

21

Short-term contracts ranged in duration from 1 to 9 months.122 The food and beverage industries

were the most commonly reported end users purchasing using short-term contracts.123 Purchasers

typically reported entering into these contracts on an as-needed or quarterly basis.124 *** U.S. producers,

15 importers, and 20 purchasers reported using short-term contracts for citric acid and certain citrate

salts.125 JBL Canada reported selling *** percent of the Canadian product using short-term contracts.126

Although 47 of the 65 responding purchasers reported spot purchases between 2006 and 2008,

the largest end users were less likely to purchase citric acid and certain citrate salts on a spot basis.127

2. Supply Conditions

There are three sources of supply in the U.S. market: domestic production, imports of subject

merchandise from Canada and China, and imports from non-subject countries. During the period of

investigation, the domestic industry held the largest share of the market followed by cumulated subject

imports from Canada and China and then imports from non-subject countries. The domestic industry’s

share of the U.S. market, by quantity, fluctuated from year to year and declined from *** percent in 2006

to *** percent in 2008.128 Cumulated subject imports’ share of the U.S. market, by quantity, increased

from *** percent in 2006 to *** percent in 2008.129 During the period of investigation, non-subject

imports’ share of the U.S. market, by quantity, decreased from *** percent in 2006 to *** percent in

2008.130

a. Domestic Production

As previously stated, whereas, of the products covered by the scope of these investigations, Tate

& Lyle produces only citric acid, both ADM and Cargill produce citric acid, sodium citrate, and

potassium citrate.131 All three U.S. producers are global companies that produce and sell agricultural-
 132 See, e.g., Hearing Tr. at 33-34 (Poulos).

 133 See, e.g., Hearing Tr. at 22 (Baroni). ADM acquired a plant in Ireland as part of that transaction, but asserts

that it had to close that facility due to competition with Chinese imports into the E.U. market. See, e.g., id.

 134 See, e.g., Hearing Tr. at 33-34 (Poulos). Tate & Lyle previously operated citric acid plants in Selby, England

and Cuernevaca, Mexico, but contended that it was forced to close the U.K. plant due to competition from unfairly

traded Chinese citric acid imports into the E.U. market. See, e.g., id.

 135 See, e.g., CR/PR at Table III-1 at n.2.

 136 See, e.g., CR/PR at Table III-2.

 137 See, e.g., Petitioners’ Prehearing Br. at 18-19, 79-81; CR at II-7, VI-9 at n.15.

 138 See, e.g., CR at VII-2.

 139 See, e.g., CR at VII-2.

 140 See, e.g., Confer. Tr. at 116 (Waite for JBL); JBL’s Postconf. Br. at 1-2; CR at VII-3.

 141 See, e.g., Confer. Tr. at 117-18 (Waite for JBL); Hearing Tr. at 167-68 (Rainville for JBL); JBL’s Posthearing

Br. at Exh. 5 at 1-2; CR at VII-3.

 142 See, e.g., CR at VII-2.

 143 See, e.g., CR/PR at Table VII-7.

 144 See, e.g., CR at VII-5. Data regarding the Chinese industry are based on questionnaire responses from 14

foreign producers that are believed to account for approximately 90 percent of Chinese export shipments to the

United States in 2008. See, e.g., CR at VII-5. Sixteen foreign producers/exporters of subject merchandise in China

submitted questionnaire responses. Two reported that they did not export subject merchandise to the United States

(continued...)

22

based products in many different countries around the world.132 ADM entered the citric acid business in

1990 when it purchased the business from Pfizer.133 In addition to its Dayton, Ohio facility, Tate & Lyle

also produces citric acid in Brazil and Colombia.134 Cargill ***.135 The three domestic producers have

*** production capacity, with ***.136

We find that this high fixed cost, capital-intensive industry is dependent on continuous

production of an organic product in a tightly controlled and sanitary fermentation process that cannot

easily be slowed or stopped. Slowdowns affect yields and shutdowns engender lengthy flushing and

sterilization operations prior to resumption of production. Furthermore, the physical design of a modern

citric acid production facility makes it difficult to engage in incremental capacity expansion. Back-end

(refining and recovery) capacity increases cannot be done in small increments whereas any increase in the

front end (fermentation) must be accompanied by increases on the back end.137

b. Imports of Subject Merchandise from Canada and China

Canada: Only one producer, JBL Canada, produces subject merchandise in Canada.138 JBL

Canada is wholly owned by the Swiss firm Jungbunzlauer AG.139 Jungbunzlauer AG has been selling

citric acid in the U.S. market since the 1970s when it supplied the market from its plant in Vienna,

Austria. In 1999, it built a plant in Canada in order to supply its customers in the United States and

Western Hemisphere from a facility located closer to those markets.140 After the Canadian facility

became operational in 2002, JBL ceased shipping citric acid to the U.S. market from Austria and replaced

those shipments with Canadian products.141 JBL Canada produces only food-grade citric acid at its

facility in Canada (no citrate salts).142

China: The Chinese citric acid industry is the largest in the world.143 The five largest reporting

Chinese producers, ***, accounted for the vast majority of reported 2008 production.144
 144 (...continued)

during the period of investigation, ***. See, e.g., CR at VII-5 & n.4. Chinese Respondents argue that the

Government of China’s recent environmental protection policies caused rapid consolidation of producers of citric

acid and citrate salts in China, with the number of producers falling from over 100 to below 20. See, e.g., Confer.

Tr. at 131 (Porter for Chinese Respondents); Chinese Respondents’ Postconf. Br. at 1; CR at VII-5 & n.6. 

According to ***. See, e.g., CR at VII-7 at n.7.

 145 See, e.g., CR/PR at Table IV-2.

 146 See, e.g., CR at IV-4.

 147 See, e.g., CR at I-13 to I-15, V-1; Petitioners’ Posthearing Br. at Exh. 2 at 4.

 148 See, e.g., CR at I-13 to I-15, V-1; Petitioners’ Posthearing Br. at Exh. 2 at 4.

 149 See, e.g., CR at V-1.

 150 See, e.g., CR at V-1; CR/PR at Figure V-1.

 151 See, e.g., CR at V-1.

 152 Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun do not join the remainder of this

opinion. See Separate and Dissenting Views of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and

Commissioner Deanna Tanner Okun.

 153 19 U.S.C. § 1677(7)(C)(i).

23

c. Non-Subject Imports

Non-subject imports represent a declining share of the U.S. market and a declining share of total

imports. As a share of total imports into the U.S. market, non-subject imports declined from *** percent

in 2006 to *** percent in 2007 and *** percent in 2008.145 In descending order of import volume in

2008, non-subject sources included Israel, Colombia, Germany, Thailand, Austria, and Belgium.146

3. Raw Material Costs

The principal raw materials used to produce citric acid and certain citrate salts consist of the

substrate (such as corn starch, molasses, dextrose and/or high fructose corn syrup) and chemicals

(including calcium carbonate and sulfuric acid). Energy, including electricity and the cost of producing

steam, are other significant components of the cost of producing citric acid.147 U.S. and Canadian

producers use corn (and sometimes other feedstocks such as molasses) as the substrate.148 Chinese

producers, on the other hand, use a variety of substrates including sweet potato powder, tapioca, wheat,

and corn.149 The costs of both substrates and energy generally rose since January 2006 but declined since

mid-2008.150 The prices of electric-power generation, transmission, and distribution rose by 10.6 percent

from January 2006 to December 2008.151 152

C. Volume of the Cumulated Subject Imports

In evaluating the volume of subject imports, section 771(7)(C)(i) of the Tariff Act provides that

the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that

volume, either in absolute terms or relative to production or consumption in the United States, is

significant.”153

Subject imports had a large and growing presence in the U.S. market during the period of

investigation. In absolute terms, the volume of cumulated subject imports from Canada and China
 154 See, e.g., CR/PR at Table C-1.

 155 See, e.g., CR/PR at Table C-1.

 156 See, e.g., CR/PR at Table C-1.

 157 See, e.g., CR/PR at Table C-1.

 158 See, e.g., CR/PR at Table C-1.

 159 See, e.g., CR/PR at Table C-1.

 160 See, e.g., CR/PR at Table C-1.

 161 See, e.g., CR/PR at Table C-1; see also, e.g., CR/PR at Tables V-4 to V-6 (showing ***); Petitioners’

Prehearing Br. at Exh. 8 (showing ***).

 162 See, e.g., CR/PR at Table C-1.

 163 See, e.g., CR/PR at Table C-1.

 164 See, e.g., CR/PR at Table IV-6.

24

increased from *** dry pounds in 2006 to *** dry pounds in 2007 and *** dry pounds in 2008.154 In

contrast, imports from non-subject countries had a smaller and declining presence in the U.S. market. 

The volume of imports from non-subject countries declined in absolute terms from 68.6 million dry

pounds in 2006 to 65.6 million dry pounds in 2007 and 55.6 million dry pounds in 2008.155 The domestic

industry’s U.S. shipments of citric acid and certain citrate salts increased from 369.5 million dry pounds

in 2006 to 399.6 million dry pounds in 2007 and 402.5 million dry pounds in 2008.156

As discussed earlier, apparent U.S. consumption was strong and increasing throughout the period

of investigation, increasing by *** percent between 2006 and 2007 and by *** percent between 2007 and

2008, for an overall increase of *** percent during the period of investigation.157

Cumulated subject imports grew at a faster pace than demand, increasing by *** percent between

2006 and 2007 and by *** percent between 2007 and 2008, for an overall increase of *** percent.158 As

a result, cumulated subject imports captured an increasing share of the U.S. market, first at the expense of

non-subject imports and by 2008 at the expense of the U.S. industry. Cumulated subject imports

increased their share of the U.S. market, by quantity, from *** percent in 2006 to *** percent in 2007 and

*** percent in 2008.159 Non-subject imports’ share of the U.S. market declined progressively from ***

percent in 2006 to *** percent in 2007 and *** percent in 2008.160 The domestic industry’s market share

increased marginally from *** percent in 2006 to *** percent in 2007 and then decreased to *** percent

in 2008.161 Thus, despite strong and increasing apparent U.S. consumption, the domestic industry’s U.S.

shipments grew at a much slower rate than U.S. consumption between 2006 and 2008, as the domestic

industry’s U.S. shipments increased by 9.0 percent while apparent U.S. consumption increased by ***

percent.162

The domestic industry’s production increased from 475.4 million dry pounds in 2006 to 488.4

million dry pounds in 2007 and 507.9 million dry pounds in 2008.163 Despite this growth in domestic

production, the ratio of cumulated subject imports from Canada and China to domestic production

increased from *** percent in 2006 to *** percent in 2007 and *** percent in 2008.164

In summary, subject imports held between one-third and one-half of the domestic market

throughout the period of investigation. Their quantity and market share grew steadily. The domestic

industry’s shipments and production rose at a pace well below the rate at which consumption increased;

thus, the domestic industry was unable to take full advantage of exceptionally strong demand conditions. 

As discussed below in Section V.D (Price Effects), the large and growing subject import volume stifled

the domestic producers’ ability to obtain price increases necessary to compensate for increased production

costs.
 165 19 U.S.C. § 1677(7)(C)(ii).

 166 See, e.g., Petitioners’ Prehearing Br. at 11-12; Petitioners’ Posthearing Br. at 8; Hearing Tr. at 22 (Baroni), 34

(Poulos); Chinese Respondents’ Postconf. Br. at 38; Hearing Tr. at 17-18, 20, 287 (Cameron).

 167 See, e.g., CR at II-22. There are relatively few substitutes for citric acid and certain citrate salts, and

questionnaire respondents reported that the prices of these substitutes did not affect the price of citric acid and

certain citrate salts. See, e.g., CR at II-21 to II-22.

 168 See, e.g., CR/PR at Table II-4.

 169 See, e.g., CR/PR at Table V-4 to V-6, Table V-2. Citric acid in solution form *** imported from China,

although U.S. and Canadian producers sold citric acid in solution form to the U.S. market. Nevertheless, the record

reflects that end users can convert dry forms into solution or have third parties perform that function for them, as

discussed above.

 170 See, e.g., CR at II-28 to II-30; PepsiCo’s Prehearing Br. at 12-13.

 171 See, e.g., Petitioners’ Posthearing Br. at Exh. 3 at 1-2; CR/PR at Table II-2, Table IV-3.

 172 See, e.g., Petitioners’ Posthearing Br. at 8; CR at II-1, II-11, II-27, II-32 to II-37; CR/PR at Table II-2, Table

II-8, Table IV-3.

25

On this basis, we find that the volume of cumulated subject imports is significant, both absolutely

and relative to consumption and production in the United States. Moreover, we find that, during the

period of investigation, the *** percent increase in the volume of subject imports is significant relative to

the *** percent increase in apparent U.S. consumption.

D. Price Effects of the Cumulated Subject Imports

In evaluating the price effects of the subject imports, section 771(7)(C)(ii) of the Tariff Act

provides that the Commission shall consider whether –

 (I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and

 (II) the effect of imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have occurred, to a significant

degree.165

The record indicates that citric acid and certain citrate salts are commodities.166 Although these

products account for a small portion of the total cost of the products in which they are used,167 price is an

important consideration to purchasers, who also reported quality and availability to be important

considerations.168

In evaluating price effects, we considered quality and other non-price differences among the

domestic like product and subject imports from Canada and China. As discussed above, there was

considerable overlap in the chemical and physical forms of products supplied to the U.S. market by the

domestic industry and producers in the subject countries, and all three sources sold large quantities of

anhydrous citric acid.169 Although caking was reported more frequently as a problem for subject imports

from China,170 Chinese product was nevertheless sold in substantial quantities for the same end-use

applications, to many of the same purchasers, and even to the highly demanding soft drink sector, as

discussed above.171 Producers in the United States, Canada, and China manufacture products that meet

quality requirements for sale as FCC/USP products.172 Despite some non-price differences among
 173 See, e.g., CR at II-25 to II-37.

 174 See, e.g., CR/PR at Table II-8.

 175 See, e.g., CR/PR at Table II-6, Table II-7, Table II-8.

 176 See, e.g., CR at V-17; CR/PR at Tables V-4 to V-8, Table C-1.

 177 See, e.g., CR at II-14 to II-37, V-1 to V-2, V-5 to V-16; CR/PR at Tables II-2 to II-8, Table IV-3, Table V-2,

Table V-3.

 178 See, e.g., CR/PR at Tables V-4 to V-10 (traditional pricing data); CR at II-14 to II-37, V-1 to V-2, V-5 to V16; CR/PR at Tables II-2 to II-8, Table IV-3, Table V-2, Table V-3 (narrative data from purchasers).

 179 See, e.g., CR at II-5 at n.14; CR/PR at D-3 to D-10 and Table D-1 (bid data); CR/PR at Tables D-2 to D-4

(purchaser pricing data).

 180 These products are as follows: (1) citric acid, granular, in dry form in 25 kilogram and 50 pound bags,

excluding all product packaged and sold as fine granular product; (2) citric acid, granular, in dry form packed in bulk

sacks (“supersacks”), excluding all product packaged and sold as fine granular product; (3) citric acid, in 48 to 52

percent solution form; (4) sodium citrate, granular, in dry form in 25-kilogram and 50-pound bags; and (5) potassium

citrate, granular, in dry form in 25-kilogram and 50-pound bags. See, e.g., CR at V-17.

 181 See, e.g., CR at V-17.

 182 The data show 139 instances of underselling at margins that ranged from less than 0.5 percent to 31.7 percent

and averaged 12.7 percent, compared to 92 instances of overselling at margins that ranged from 0.4 percent to 55.7

percent and averaged 15.0 percent. See, e.g., CR/PR at Table V-10. We note that higher margins of overselling

(continued...)

26

sources,173 products manufactured in the United States, Canada, and China are generally of similar

quality.174 Questionnaire respondents generally reported that subject imports from Canada and China are

substitutable for one another and for the domestic like product.175 Because producers in the United States,

Canada, and China supply a product of acceptable quality and all sold large quantities to the U.S. market,

we find that they competed primarily on price.

In the final phase of these investigations, the Commission tailored its collection of pricing data to

reflect more precisely the conditions of competition in this industry as revealed during the preliminary

phase. Specifically, the Commission requested that importers and domestic producers report sales prices

as follows: on a delivered basis to control for differences in transportation costs; to end users and

distributors separately; for citric acid sold in solution form; and for spot and contract sales separately for

three citric acid pricing products that accounted for a large portion of the U.S. market.176 In the finalphase questionnaires, the Commission also asked a number of questions, particularly of purchasers, about

how the U.S. market works, the negotiation process, and the role of the various players in the market.177

In addition to collecting traditional pricing data and narrative data from purchasers,178 the Commission

also requested pricing data and bid data on the largest annual bids from those purchasers that purchased

more than 20 million pounds of citric acid and certain citrate salts in 2006, 2007, or 2008.179 As discussed

below, we find that these more comprehensive data portray a very different picture than the more limited

data from the preliminary phase.

The Commission obtained usable quarterly delivered pricing data for five products sold to

unrelated customers from three domestic producers, *** of subject merchandise from Canada, and 21

importers of subject merchandise from China.180 Pricing data reported in the final phase of these

investigations by these firms accounted for approximately 56.3 percent of the domestic industry’s U.S.

shipments of citric acid and certain citrate salts, *** percent of U.S. shipments of subject imports from

Canada, and 60.0 percent of U.S. shipments of subject imports from China in 2008.181

Taken as a whole, these pricing data show mixed under- and over-selling, with underselling

occurring in *** percent of all observations.182 183 Because the domestic industry’s sales were highly
 182 (...continued)

occurred after the first quarter of 2008 following the filing of the petition, and the range of overselling through the

first quarter of 2008 was much narrower, particularly for contract sales. See, e.g., CR/PR at Figures V-3 and V-4.

 183 Commissioner Lane and Commissioner Pinkert note that, in the preliminary phase of these investigations the

more limited pricing data collected indicated that: “subject imports were consistently priced higher than the domestic

like product in the U.S. market, at substantial margins ... .” USITC Pub. 4008 at 35. In the preliminary phase, there

was underselling in only 12 of 104 price comparisons, accompanied by considerable overselling margins (as high as

120.6 percent, and at least ten percent in 32 quarters for subject imports from China). USITC Pub. 4008 at 35. In

stark contrast to the limited pricing data in the preliminary phase, the additional and more detailed pricing data in the

final phase of these investigations show underselling in 139 of 231 comparisons, with much smaller margins of

overselling, particularly in the contracts categories and for prices through the first quarter of 2008. See, e.g., CR/PR

at Tables V-4 to V-8 and Table V-10.

 184 (derived from CR/PR at Table V-4 to Table V-6).

 185 (derived from CR/PR at Table V-4 to Table V-6) (indicating that 77.7 percent of the domestic industry’s sales

of pricing products 1 to 3, by quantity, were oversold by subject imports from either China or Canada and that 58.9

percent of sales of pricing products 1 to 3 imported from Canada oversold the domestic like product compared to

58.4 percent of sales of pricing products 1 to 3 imported from China).

 186 See, e.g., CR/PR at Tables V-4 to Table V-6 showing the following price increases:

* * * * * * *

See also, e.g., Hearing Tr. at 15 (Ellis), 55 (Lorusso), 114 (Szamosszegi), 139, 158 (Anderson). 

 187 Overall, the data show underselling in 44 percent of comparisons, representing 45 percent of subject import

quantities and 30 percent of the domestic industry’s quantities for contract sales of pricing products 1 to 3. For

subject imports from China alone, underselling occurred in 64 percent of comparisons, representing 58 percent of

subject import quantities from China and 53 percent of the domestic industry’s quantities for contract sales of pricing

products 1 to 3 where there were comparisons. (derived from CR/PR at Tables V-4 to V-6).

 188 19 U.S.C. § 1677(I). Although we have separately analyzed the pricing data from before and following the

filing of the petitions, we do not discount the data beginning in late 2007, as requested by petitioners.

 189 See, e.g., CR/PR at Tables V-4 to V-6.

27

concentrated in contract transactions, we have paid particular attention to those data. Like the data as a

whole, those data show a mixed picture of underselling and overselling, with 31 instances of underselling

and 51 instances of overselling.184 Most of the volume of reported import and domestic contract sales was

associated with overselling comparisons.185

In addition, the record indicates that the filing of the petitions in April 2008 affected prices in the

U.S. market; subject import prices, even for contract sales (particularly for China), rose substantially over

the course of 2008.186 We note that the relative instances of overselling and underselling changed after

the filing of the petitions in the first quarter of 2008, and that underselling was much more prevalent prior

to that time. Again paying particular attention to the contract transactions, breaking down the above-cited

31 instances of underselling and 51 instances of overselling, the data reveals that through the first quarter

of 2008, the contract transactions reflected 28 instances of underselling and 35 instances of overselling,

which is more balanced.187 In the last three quarters of 2008, contract transactions reflected only 3

instances of underselling and 16 instances of overselling.188 Moreover, the margins of overselling, which

had been fairly small through the first quarter of 2008 and, as we explain below, had been acting as a cap

or ceiling on domestic prices, tended to widen during the last three quarters of 2008.189 This widening of

margins or raising of the ceiling on domestic prices after the filing of the petitions did not benefit the

domestic industry in 2008 as much as might be expected, due to the portion of the domestic industry’s
 190 We note that prices for the domestic like product increased by much less than prices of subject imports in

2008 because most domestic sales are subject to annual fixed-price contracts whose prices are set in the final quarter

of the preceding year whereas a larger proportion of sales of subject imports are made pursuant to short-term

contracts, long-term contracts set at less regular intervals, and spot sales. See, e.g., CR at V-11 to V-13. Moreover,

some purchasers indicated that Chinese suppliers are less likely to adhere to contract price terms. See, e.g., CR at V6. As a result, the prices of subject imports reacted sooner to the April 2008 filing of the petitions in these

investigations than prices of the domestic like product.

 191 See, e.g., CR/PR at Table II-8 (for those purchasers reporting subject imports to be higher or lower-priced

than the domestic like product, more (33 purchasers) reported subject imports to be lower priced than reported

domestically produced products to be lower priced (14 purchasers)).

 192 We have also examined data submitted by purchasers (predominantly large purchasers) on the prices they

paid for citric acid products produced in the United States and imported from the subject countries. See, e.g., CR/PR

at Table D-2 to D-4. These data show mostly underselling by the subject imports and thus, if anything, further

support a finding of significant underselling. We recognize that the purchaser pricing data must be taken into

account carefully, because the purchaser pricing data on subject imports is not precisely comparable to the purchaser

pricing data on the domestic like product.

We have also examined data submitted by purchasers on their largest annual bids during the period of

investigation. See, e.g., CR/PR at Table D-1; CR at D-9 to D-10. These data are consistent with our analysis to the

extent that they also show that subject imports from Canada and China were priced at similar levels to, and competed

for, sales to large purchasers against domestically produced citric acid and certain citrate salt products. See, e.g., id.

 193 See, e.g., CR/PR at Tables V-4 to V-8.

 194 See, e.g., CR at V-1.

 195 See, e.g., CR/PR at Table C-1.

 196 The domestic industry’s average unit net sales value was $0.44 in 2006, $0.44 in 2007, and $0.53 in 2008

compared to average unit COGS of $0.44 in 2006, $0.46 in 2007, and $0.52 in 2008. See, e.g., CR/PR at Table C-1.

28

sales that were under annual contracts.190 Finally, we observe that most purchasers considered subject

imports to be lower-priced than the domestic like product.191

Overall, we find that the pricing data present a varied picture that is consistent with a finding of

significant underselling, particularly for a commodity-type product for which large price differences

would not be expected. Moreover, as is evident from Figures V-3 through V-5 of the Staff Report,

subject import prices and domestic prices for contract sales to end users, which accounted for a majority

of the domestic and import volume, were nearly the same and tracked closely. As discussed below, the

import prices were sufficiently low to prevent price increases needed by the domestic industry to

compensate for increased costs.192 Subject import pricing acted essentially as a cap or ceiling on the price

levels that could be obtained by domestic producers. The underselling that occurred was significant

because it established the cap or ceiling at low levels.

Prices of the domestic like product and subject merchandise from Canada and China were

generally stable in the earlier portion of the period of investigation and were higher at the end of the

period of investigation.193 Accordingly, we do not find that cumulated subject imports from Canada and

China significantly depressed prices of the domestic like product in the U.S. market.

We have also considered whether cumulated subject imports from Canada and China suppressed

prices of the domestic like product to a significant degree. Consistent with increasing substrate and

energy costs,194 the domestic industry’s average unit cost of goods sold (“COGS”) increased from $0.44

per dry pound in 2006 to $0.46 per dry pound in 2007 and $0.52 per dry pound in 2008.195 During this

time, the domestic industry’s average unit sales value was only slightly, if at all, higher than its unit

COGS, not even factoring in selling, general, and administrative costs.196 Although market demand was

strong and increasing, the domestic industry was not able to increase its prices to levels that were

sufficient to cover the increase in its costs. Consequently, the domestic industry experienced a cost-price
 197 See, e.g., CR/PR at Table C-1.

 198 Commissioner Lane notes that, in the preliminary phase of these investigations, COGS as a share of net sales

was 96.3 percent in 2005 and 101.1 percent in 2007, but improved significantly to 92.8 percent in the first quarter of

2008. Based on that information, Commissioner Lane found that there was only “some indication of price

suppression.” USITC Pub. 4008 at 36. The complete record for the final phase of these investigations, however,

shows COGS as a share of net sales was 98.6 percent in 2006, 103.6 percent in 2007, and 97.9 percent in 2008. 

Thus, it is now clear that the domestic industry experienced a significant cost-price squeeze from 2006 to 2007 and

was not able to raise prices in 2008 to sufficiently cover costs such that it could operate at a reasonable level of

profitability.

 199 See, e.g., CR/PR at Table V-4 to V-8.

 200 See, e.g., CR/PR at Figure V-1.

 201 Compare, e.g., Mem. INV-FF-060 at Table C-1 with, e.g., CR/PR at Table C-1.

 202 See, e.g., CR/PR at Table V-4 (pricing product 1) (contract sales to end users, Oct.-Dec. 2006: Canada $***,

China $***, U.S. in Jan.-Mar. 2007: $***); Table V-5 (pricing product 2) (contract sales to end users, Oct.-Dec.

2006: Canada $***, China $0.39, U.S. in Jan.-Mar. 2007: $0.47); Table V-6 (pricing product 3) (contract sales to

end users, Oct.-Dec. 2006: Canada $***, U.S. in Jan.-Mar. 2007: $0.44).

 203 See, e.g., CR/PR at Table C-1 (showing ratio of COGS to net sales of *** percent in 2007).

29

squeeze, as its unit COGS as a share of unit net sales was very high throughout the period of investigation

and increased from 98.6 percent in 2006 to 103.6 percent in 2007 before declining to 97.9 percent in

2008.197 198

We next examined the extent to which subject imports played a role in the cost-price squeeze

experienced by the industry. In particular, we considered price and market developments that contributed

to the industry’s contract price levels for 2007 and 2008, the most recent contract years within the period

of investigation. As described above, in the fourth quarter of each year the domestic industry negotiates

annual fixed-price contracts for nearly all of its sales volumes for the upcoming year.

The domestic industry’s contract prices for 2007 were relatively unchanged from 2006.199 The

flat price levels occurred despite the fact that the price of corn, which represents the industry’s largest

single cost item, increased by more than 50 percent from September 2006 to November 2006.200 The flat

industry prices were a key reason for the spike in the COGS/net sales ratio experienced by the domestic

industry in 2007.

We find that the domestic industry’s inability to obtain higher prices in 2007, despite the large

increase in corn prices and growing demand for citric acid, was due in significant part to the large and

growing presence of relatively low-priced subject imports. Subject imports had increased in market share

by *** percentage points from 2005 to 2006.201 Subject import prices in late 2006 for contract sales, and

even certain spot sales, were frequently near, at, or below the low levels that domestic producers obtained

for their 2007 contracts.202 The increased presence of low-priced subject imports left the domestic

industry in no position to demand 2007 prices sufficient to offset surging corn costs. Had the domestic

industry insisted on higher prices reflective of its increasing raw materials costs, its prices would have

exceeded the prices of subject imports. Even though many of the resulting subject import prices for the

2007 contracts were at, or somewhat above, domestic prices, the pricing pressure from the large and

increasing volume of cumulated subject imports made it impracticable for the domestic industry to

increase its prices to the degree that would have been required to recover its increasing production

costs.203

We do not agree with respondent’s position that the domestic industry was unable to recover its

increasing raw material costs in 2007 because of contracts negotiated near the end of 2006 that did not
 204 See, e.g., Chinese Respondents’ Prehearing Br. at 44; P&G’s Prehearing Br. at 42-43.

 205 See, e.g., CR/PR at Figure V-1.

 206 See, e.g., CR/PR at Figure I-1, Tables V-4 to V-8, Tables D-1 to D-4.

 207 See, e.g., CR/PR at Table V-4 (pricing product 1) (contract sales to end users, Oct.-Dec. 2007: Canada $***,

China $***, U.S. $***; U.S. in Jan.-Mar. 2008: $***); Table V-5 (pricing product 2) (contract sales to end users,

Oct.-Dec. 2007: Canada $***, China $***, U.S. $***; U.S. in Jan.-Mar. 2008: $0.52); Table V-6 (pricing product

3) (contract sales to end users, Oct.-Dec. 2007: Canada $***, U.S. $0.44; U.S. in Jan.-Mar. 2008: $0.51).

 208 See, e.g., CR/PR at Tables V-4 to V-6. Per-pound prices for contracts to end users from fourth quarter 2007

to first quarter 2008: pricing product 1 – U.S. $*** to $***, Canada $*** to $***, China $*** to $0.57; pricing

product 2 – U.S. $0.47 to $0.52, Canada $*** to $***, China $*** to $***; pricing product 3 – U.S. $0.44 to $0.51,

Canada $*** to $***.

 209 See, e.g., CR/PR at Table C-1.

 210 See, e.g., CR/PR at Table C-1.

 211 See, e.g., Petitioners’ Prehearing Br. at 67-68; Petitioners’ Posthearing Br. at 4-5.

30

account for an unexpected and significant increase in corn prices in 2007.204 In fact, corn prices rose

substantially in the latter part of 2006. Although corn prices remained relatively flat and low during the

first nine months of 2006, prices increased by 28 percent between September 2006 and October 2006, and

another 21 percent in November 2006. The October 2006 spot price for Central Illinois yellow corn was

33 percent higher than the average price over the first nine months of 2006. By November 2006 the spot

price was a startling 61 percent higher than the average price over the first nine months of 2006.205 Thus,

the prospects for increases in corn prices above the average 2006 levels were not unknown to the

domestic citric acid industry in the last quarter of 2006 when it was negotiating its 2007 contracts. Yet

the domestic industry was unable to secure adequate price increases to recover the 2007 increase in raw

material costs.

With regard to the 2008 contracts, after an extended period of high corn prices in 2007 and

deeper operating losses, the domestic industry was able to secure meaningful but inadequate price

increases from its customers.206 We find that subject imports, whose volume continued to grow sharply in

2008 (by *** percent) and to take more market share (*** percentage points), played a large role in

keeping U.S. producers from obtaining sufficient price increases both to recover the cost increases of

2007/2008 and to increase net operating income to more reasonable levels. Although certain subject

import prices were rising toward the end of 2007, the prices generally remained at or near domestic prices

and were low in comparison with the domestic industry’s negotiated contract prices for 2008.207 The

increases that the domestic industry was able to negotiate for 2008 mirrored, to a significant degree,

contemporaneous increases in prices for subject imports.208 Thus, for the 2008 contract year, it appears

that subject imports continued to establish prices that had a suppressing effect on the ability of the

domestic industry to obtain reasonable profits. At these prices, the domestic industry continued to have

high COGS to net sales ratios and to experience significant losses, as discussed below.209 Remarkably,

the domestic industry’s high COGS to net sales ratios occurred in a time of strong and increasing

demand.210

Our finding of significant price suppression is buttressed by the fact that the domestic industry

obtained significantly higher prices for its 2009 contracts negotiated in the final quarter of 2008.211 These

negotiations took place after the filing of the petitions and after Commerce had issued its affirmative

preliminary antidumping and countervailing duty determinations. The domestic price increases that
 212 See, e.g., EDIS Doc No. 402203. Purchaser input, overall, tends to confirm the price-dampening effects of

subject imports, particularly imports from China. Most purchasers reported that the availability of Chinese product

tended to reduce contract prices. See, e.g., CR at V-8 to V-10; CR/PR at Table V-1, Table V-2. In conversations

with staff regarding lost sales and lost revenue allegations, purchasers also reported price-based competition from

subject imports from Canada and China and that the domestic industry lost sales and/or revenues to pricecompetitive subject imports from Canada and China, although there were relatively few fully confirmed lost sales

and lost revenue allegations. See, e.g., CR at V-38 to V-52; CR/PR at Table V-11, Table V-12.

 213 Commissioners Lane and Pinkert add their finding that, under the specific conditions of competition for this

industry (whereby a large percentage of the domestic industry’s sales occur pursuant to annual contracts that are

entered into well in advance), the existence and availability of significant subject producer capacity, production, and

inventories enhanced the price-dampening effects of subject imports in the U.S. market. CR/PR at Table VII-4. 

They note in this regard that there was extensive testimony at the hearing as to the leverage enjoyed by purchasers

during contract negotiations as a result of the overhang of subject producer capacity. Hearing Tr. at 44

(Christiansen), 77-78, 108-09 (Baroni), 314 (Ellis). 

Commissioners Lane and Pinkert find further that the record of the final phase investigations reflects

significantly increased interest in 2008 on the part of Chinese producers in the U.S. market (relative to the interest

that was evident during the preliminary investigation). Although the record of the preliminary investigation

indicated a steady decrease in exports from China to the United States as a share of the Chinese industry’s total

shipments (as well as projections of a further year-over-year decrease from 9.3 percent in 2007 to 7.3 percent for

2008), the final-phase record shows exports from China to the United States increasing as a share of total shipments

from 9.4 percent in 2007 to 10.0 percent in 2008. CR/PR at Table VII-3.

Similarly, during the preliminary phase of these investigations, subject producer end-of-period inventories

(which were primarily from China) were projected to be *** million pounds for 2008, but the record in the final

phase shows that subject end-of-period inventories turned out to be *** million pounds for 2008. Compare, e.g.,

Mem. INV-FF-060 at Tables VII-1 and VII-2 with, e.g., CR/PR at Tables VII-1, VII-3 and VII-4. Although it is not

necessary for them to determine whether the domestic industry is imminently threatened with material injury,

Commissioners Lane and Pinkert note that the increase in the immediate availability of subject imports is indicative

of such threat.

 214 (derived from domestic producers’ questionnaire responses).

 215 Commissioner Lane and Commissioner Pinkert note that the evidence on the record of the preliminary

investigations did not support a finding of a reasonable indication of significant pricing pressure from subject

imports because the pricing data showed overwhelming overselling at large margins as well as significant cost-price

gains in the first quarter of 2008. However, the evidence on the record of the final investigations, in stark contrast to

the preliminary record, shows significant underselling of substantial volumes of the domestic like product, a

meaningful but inadequate cost-price gain in full-year 2008, and a causal nexus between subject imports and the

domestic industry’s poor performance, as discussed below in section V.E (Impact). Thus, it is clear that subject

imports exerted significant pricing pressure on the domestic industry throughout the period of investigation.

31

followed the retreat of subject imports from the market confirm the dampening effects of the imports on

domestic prices in 2006, 2007, and 2008.212 213

We have considered respondents’ contention that low prices obtained by the domestic industry

were due to intra-industry competition among the three domestic producers. The record does reflect that

***, which ***,214 ***. Moreover, purchasers indicated that some lost sales and revenues allegations

actually reflected competition among domestic producers. Thus we find that intra-industry competition

played a role in the inadequate price levels obtained by domestic producers. This does not call into

question the record evidence showing significant pricing pressure from cumulated subject imports from

Canada and China, as described above.215 The share of purchasers reporting that the market presence of

subject imports tended to reduce contract prices was much larger than the share reporting that the
 216 According to purchasers, subject imports, in particular those from China, tended to bring prices down in

negotiations, whereas the presence of competing U.S. products had a more mixed effect on negotiations, sometimes

causing prices to decrease and sometimes to increase. Purchasers were asked whether the presence of U.S.,

Canadian, or Chinese sellers in contract negotiations increased prices, reduced prices, or had no impact on price at

all. Most purchasers, 76.9 percent, reported that the presence of Chinese products reduced the price, as compared to

42.6 percent for U.S. products and 38.1 percent for Canadian products. A significant share of purchasers, 22.2

percent, also reported that the presence of U.S. sellers tends to raise prices, as compared to 9.5 percent for Canada

and zero for China. These data further support our conclusion that subject imports put downward pricing pressure

on domestic prices in contract negotiations. (derived from CR/PR at Table V-2).

 217 In its final determinations, Commerce calculated a 23.21 percent weighted-average ad valorem dumping

margin for Canadian producer JBL and all other Canadian producers. Commerce calculated the following margins

for Chinese producers: 94.61 percent (Yixing Union Biochemical Co., Ltd.); 129.08 percent (Shandong TTCA

Biochemistry Co., Ltd.); and 111.85 (various named exporter/producer combinations); and 156.87 percent (all

others). See, e.g., CR at I-6 and I-7. Commerce also made affirmative countervailing duty determinations regarding

subject imports from China. It assigned the following ad valorem margins: 3.60 percent (Yixing Union Biochemical

Co., Ltd. and Yixing Union Cogeneration Co., Ltd.); 12.68 percent (Shandong TTCA Biochemistry Co., Ltd.);

118.95 percent (Anhui BBCA Biochemical Co., Ltd.); and 8.14 percent (all others). See, e.g., CR at I-7 to I-8.

 218 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the

Commission considers, in addition to imports, other factors that may be contributing to overall injury. While these

factors, in some cases, may account for the injury to the domestic industry, they also may demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”).

 219 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Prelim.), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

 220 As noted above, apparent U.S. consumption increased from *** dry pounds in 2006 to *** dry pounds in

2007 and *** dry pounds in 2008. See, e.g., CR/PR at Table C-1.

32

presence of competing U.S. products tended to reduce such prices.216 Moreover, the competition between

the three domestic producers continued in 2008 (as 2009 contracts were being negotiated) and did not

prevent the industry from obtaining significant price increases as the presence of subject imports in the

U.S. market diminished.

For all of these reasons, we find that the large and increasing volume of subject imports have had

significant adverse effects on prices of the domestic like product.

E. Impact of the Cumulated Subject Imports on the Domestic Industry217

In examining the impact of subject imports, section 771(7)(C)(iii) of the Tariff Act provides that

the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the

industry.”218 These factors include output, sales, inventories, ability to raise capital, research and

development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors

are considered “within the context of the business cycle and conditions of competition that are distinctive

to the affected industry.”219

We have examined the performance indicia for the domestic industry producing citric acid and

certain citrate salts. Overall, the record in the final phase of these investigations indicates that a number

of the domestic industry’s performance indicators improved between 2006 and 2007 but slowed or

declined between 2007 and 2008 notwithstanding strong and increasing demand in the U.S. market

throughout the three-year period between 2006 and 2008.220 Moreover, improvements in output or sales

volumes are of limited benefit to the domestic industry if it is unable to raise prices sufficiently to

produce a reasonable positive operating income, net income, and cash flow. The domestic industry was
 221 The domestic industry’s operating income was negative $10.7 million in 2006, negative $21.6 million in

2007, and negative $7.5 million in 2008. Its net income was negative $18.6 million in 2006, negative $26.1 million

in 2007, and negative $53.2 million in 2008. Its cash flow was negative $3.1 million in 2006, negative $11.9 million

in 2007, and negative $41.7 million in 2008. See, e.g., CR/PR at Table VI-1. We note that the net loss for 2008 was

impacted by large non-operating expenses representing ***. See, e.g., CR at VI-3 at nn.7-8. These items represent

application of proper accounting principles for determining net income, but may not represent current cash outflow. 

However, even without these non-operating expense items, in addition to negative operating income, the domestic

industry would have had negative net income and negative cash flow in 2008.

 222 See, e.g., Hearing Tr. at 18 (Cameron), 193 (Hoffman), 204 (Bloom), 228 (Cameron), 265-66 (Cameron).

 223 See, e.g., CR/PR at Table C-1.

 224 See, e.g., CR/PR at Table C-1.

 225 U.S. export shipments of citric acid and certain citrate salts increased from 96.7 million dry pounds in 2006 to

114.3 million dry pounds in 2007 but then decreased to 113.0 million dry pounds in 2008. See, e.g., CR/PR at Table

C-1. These shipments accounted for a fairly stable percentage of total industry shipments, of between 21 and 22

percent. (derived from CR/PR at Table C-1).

 226 See, e.g., CR/PR at Table C-1.

 227 See, e.g., CR/PR at Table C-1.

 228 The domestic industry’s capacity utilization levels increased from 85.8 percent in 2006 to 88.2 percent in

2007 and 91.7 percent in 2008. See, e.g., CR/PR at Table C-1.

33

unable to do this, as evidenced by the fact that it had substantial operating losses, negative net income,

and negative cash flow throughout the period of investigation.221

We find that the domestic industry benefitted from purchasers’ preference for a U.S. supplier222 to

the extent that many of its production indicators remained positive, but the large and increasing presence

of cumulated subject imports put pressure on the prices that the domestic industry received for its sales. 

Despite strong and increasing demand, it was unable to raise prices adequately to improve its operating

income while meeting rising costs for raw materials and energy, and its financial performance continued

to suffer. By the end of the period of investigation, cumulated subject imports, which had previously

gained market share at the expense of non-subject imports, began taking market share from the domestic

industry, as discussed above, with significant adverse effects on the domestic industry’s performance.

As previously stated, the domestic industry’s output rose from 2006 through 2008. The domestic

industry’s 6.8 percent increase in production quantity, however, did not match the much greater increase

in apparent U.S. consumption of *** percent. The domestic industry’s production of citric acid and

certain citrate salts increased from 475.4 million dry pounds in 2006 to 488.4 million dry pounds in 2007

and 507.9 million dry pounds in 2008.223 The domestic industry’s U.S. shipments of citric acid and

certain citrate salts increased from 369.5 million dry pounds in 2006 to 400.0 million dry pounds in 2007

and 402.5 million dry pounds in 2008.224 These data represented an increase in U.S. shipments of 9.0

percent, which did not keep pace with the *** percent increase in apparent U.S. consumption. Exports,

which were an appreciable share of the domestic industry’s total shipments, increased overall, as domestic

producers sought to maintain high capacity-utilization levels.225

The domestic industry’s end-of-period inventories of citric acid and certain citrate salts decreased

from 77.6 million dry pounds in 2006 to 52.3 million dry pounds in 2007 and 44.6 million dry pounds in

2008.226 The domestic industry’s average production capacity remained stable at 553.9 million dry

pounds between 2006 and 2008.227 The domestic industry’s capacity-utilization levels improved over the

period of investigation.228

Industry productivity increased by 11.8 percent between 2006 and 2008 and per-unit labor costs

dropped by 10.1 percent. Although these labor-related production indicators should have improved the

domestic industry’s bottom line, such improvements were not sufficient to allow the domestic industry to
 229 See, e.g., Hearing Tr. at 29 (Warner for ADM), 99 (Baroni for ADM).

 230 See, e.g., CR/PR at Table C-1.

 231 See, e.g., CR/PR at Table C-1. Net sales, by quantity, increased from 466.1 million dry pounds in 2006 to

513.9 million dry pounds in 2007 and 515.5 million dry pounds in 2008. Id.

 232 See, e.g., CR/PR at Table C-1. Commissioner Lane and Commissioner Pinkert note that, in the preliminary

phase of these investigations, data through first quarter 2008 showed that the domestic industry’s market share had

improved to *** percent, up from 2007; however, in the final phase of these investigations, the data for full-year

2008 indicate the opposite (i.e., the domestic industry’s market share declined from *** percent in 2007 to ***

percent in 2008). Compare, e.g., Mem. INV-FF-060 at Table C-1 with, e.g., CR/PR at Table C-1.

 233 See, e.g., CR/PR at Table C-1.

 234 The domestic industry’s average unit net sales value was $0.44 in 2006, $0.44 in 2007, and $0.53 in 2008

compared to average unit COGS of $0.44 in 2006, $0.46 in 2007, and $0.52 in 2008. See, e.g., CR/PR at Table C-1.

 235 See, e.g., CR/PR at Table C-1.

 236 See, e.g., CR/PR at Table C-1.

 237 See, e.g., CR/PR at Table C-1.

 238 See, e.g., CR at VI-12, VI-14 to VI-15; CR/PR at Table VI-5.

 239 See, e.g., CR at VI-12; CR/PR at Table VI-5.

34

produce reasonable positive financial results. In addition, the domestic industry testified that the

increased productivity was not necessarily, in and of itself, a positive for the industry as it was partially

accomplished by foregoing plant maintenance.229 Moreover, the improvements came at the expense of the

employees in the industry. From 2006 to 2008, the number of production-related jobs fell by 4.6 percent

and hours worked fell by 4.5 percent. Overall, wage expenses fell by 4.0 percent as the average hourly

wages increased by only 0.5 percent.230

The domestic industry’s net sales increased by 10.6 percent from 2006 to 2008, when measured

by quantity, and increased by 32.0 percent over the same period, when measured by value.231 Although

the domestic industry’s net sales and production volumes increased, they did not increase proportionally

to demand, so the domestic industry’s market share fell. The domestic industry’s share of the U.S.

market, by quantity, increased from *** percent in 2006 to *** percent in 2007 but then decreased to ***

percent in 2008.232

The domestic industry’s average unit COGS increased from $0.44 per dry pound in 2006 to $0.46

per dry pound in 2007 and $0.52 per dry pounds in 2008.233 During this time, the domestic industry’s

average unit COGS was equal to or within pennies of its average unit net sales value.234 Despite strong

and growing demand, the domestic industry’s price increases were not always sufficient to cover

increases in its cost of production and were not sufficient to avert operating losses. Consequently, the

domestic industry experienced a cost-price squeeze to the extent that its COGS as a share of net sales was

very high throughout the period of investigation and increased from 98.6 percent in 2006 to 103.6 percent

in 2007 before declining to 97.9 percent in 2008.235

The domestic industry posted operating losses in each full year from 2006 to 2008. The domestic

industry’s $10.7 million operating loss in 2006 deteriorated to a $21.6 million operating loss in 2007

before improving somewhat, but still remaining significant, as the industry posted a $7.5 million

operating loss in 2008.236 The domestic industry’s operating income margin declined from negative 5.2

percent in 2006 to negative 9.5 percent in 2007 before improving somewhat to negative 2.8 percent in

2008.237 Capital expenditures were low and less than depreciation in every period, an indication that the

domestic industry was not expanding or improving its productive facilities, but at best maintaining

them.238 The overall level of research and development expenditures was also low.239 
 240 With respect to the analysis required by the Federal Circuit in Bratsk, Commissioner Pinkert finds that the

first triggering factor is satisfied, as citric acid is a commodity product for these purposes, but that the second

triggering factor is not satisfied, because price-competitive non-subject imports are not a significant factor in the

U.S. market. Non-subject imports decreased over the period of investigation, and, at their highest level, only

accounted for *** percent of the U.S. market. CR/PR at Table IV-5.

 241 See, e.g., Chinese Respondents’ Prehearing Br. at 12-24, 32; PepsiCo’s Prehearing Br. at 1-6; ; JBL’s

Prehearing Br. at 12-13; P&G’s Prehearing Br. at 16-28; JBL’s Posthearing Br. at 1-4; Hearing Tr. at 75-76

(Hodges), 183-84 (Smith), 189-90 (Taylor), 193-94 (Hofmann), 199-200 (Pensak), 203-04 (Bloom); Chinese

Respondents’ Posthearing Br. at Exh. A at 46-51; PepsiCo’s Posthearing Br. at 3-5.

 242 See, e.g., Softwood Lumber from Canada, Invs. Nos. 701-TA-414 and 731-TA-928 (Article 1904 NAFTA

Remand), USITC Pub. 3658 at 108, n.310 (Dec. 2003); see also Small-Diameter Graphite Electrodes from China,

Inv. No. 731-TA-1143 (Final), USITC Pub. 4062 at 22-23 (Feb. 2009); Sodium Hexametaphosphate from China,

Inv. No. 731-TA-1110 (Final), USITC Pub. 3984 at 27, n.109 (Mar. 2008); Electrolytic Manganese Dioxide from

China and Australia, Invs. Nos. 731-TA-1124 and 1125 (Prelim.), USITC Pub. 3955 at 18, n.122 (Oct. 2007);

Certain Lined Paper School Supplies from China, India, and Indonesia, Invs. Nos. 701-TA-442 to 443 and 731-TA1095 to 1097 (Final), USITC Pub. 3884 at 25, n.192 and 58, n.49 (Sept. 2006).

 243 See, e.g., CR at II-8 to II-10, II-21.

 244 See, e.g., CR at III-2 (indicating that ***).

35

We conclude that cumulated subject imports had a material adverse impact on the condition of the

domestic industry. We find that there is a sufficient causal nexus between the subject imports and the

domestic industry’s poor performance during the period of investigation to attribute significant adverse

effects on the domestic industry to subject imports. Specifically, we find that the volume of cumulated

subject imports from Canada and China was significant both absolutely and relative to production and

consumption and increased significantly relative to consumption. Cumulated subject imports, which were

already large, increased faster than demand, first taking market share from non-subject imports and then

the domestic industry. As the domestic industry’s costs increased, the significant and increasing volume

of cumulated subject imports put downward pressure on prices, precluding the domestic industry from

reaping the price benefits of the increasing demand. The large and growing volume of subject imports

that suppressed prices of the domestic like product to a significant degree caused poor financial operating

performance by the domestic industry during the period of investigation.

We have considered whether there are other factors that have had an impact on the domestic

industry. Non-subject imports were a small and declining portion of the U.S. market during the period of

investigation. The presence of non-subject imports does not undermine our finding of significant adverse

effects due to cumulated subject imports because non-subject imports were priced higher and were not

taking sales from the domestic industry.240

Respondents contend that the domestic industry had inadequate capacity to supply the entire U.S.

market, and they claim that purchasers needed additional sources due to concerns about the domestic

industry’s reliability. They assert that larger purchasers needed to multi-source because the magnitude of

their demand was greater than any individual supplier could reliably supply.241 Contrary to the

implication of respondents’ argument, the fact that the domestic industry may not be able to supply all of

demand does not mean that the domestic industry cannot be materially injured or threatened with material

injury by reason of subject imports.242 Moreover, we find that respondents’ claims concerning the

reliability of the domestic industry are exaggerated. Although there is some evidence that shipments from

the domestic industry were delayed or that domestic producers were unable to meet certain customers’

requests for products or supplemental quantities,243 ***.244 Finally, respondents’ arguments fail to take
 245 We note that the domestic industry’s exports, some of which are to affiliated companies, fell in 2009 as

domestic producers were able to divert some of these sales back to the U.S. market once prices began to improve. 

See, e.g., Petitioners’ Posthearing Br. at Exh. 2 at 17, Exh. 3 at 6-7; 19 U.S.C. § 1677(I). Furthermore, many of the

purchaser complaints about lack of supply pertain to 2008 and 2009, after our period of investigation and/or after

imposition of the requirement for antidumping and countervailing duty deposits on subject imports. See, e.g.,

Hearing Tr. at 45-46 (Christiansen), 60-61 (Anderson), 193-95 (Hofmann), 199-201 (Pensak), 315 (Ellis); CR at II9. It is not surprising that the market would experience a period of adjustment when the supply of subject imports

has fallen off substantially. See, e.g., EDIS Doc No. 402203; EDIS Doc. No. 402231; Petitioners’ Posthearing Br. at

Exh. 33.

 246 See, e.g., CR at VI-10; CR/PR at Table VI-4 (indicating that a variance analysis illustrates that from 2006 to

2008, the decrease in the domestic industry’s losses resulted from a positive price variance ($44.1 million; unit

revenues increased), in spite of a negative cost/expense variance (negative $39.8 million; unit total costs increased)).

 247 See, e.g., Chinese Respondents’ Prehearing Br. at 54-64; P&G’s Prehearing Br. at 34-39; Chinese

Respondents’ Posthearing Br. at Exh. A at 6-10.

 248 Moreover, ***. See, e.g., CR at VI-13 at n.18.

 249 See, e.g., Petitioners’ Posthearing Br. at 6-8, Exhs. 1 to 4, Exh. 20 (as revised). 

 250 See, e.g., CR at V-1, VI-8.

 251 See, e.g., CR at VI-1 to VI-2.

 252 Derived from domestic producer supplemental questionnaire responses. Moreover, even if they could

successfully hedge against significant adverse price movements in the cost of raw materials by locking in future raw

material prices, such hedging could not protect the domestic producers against operating losses if they were unable

to reflect current raw material costs.

36

into consideration that purchasers seeking multiple sources have three domestic producers from which to

choose, provided that they are willing to pay domestic prices.245

We have addressed above in our price effects analysis respondents’ arguments concerning the

domestic industry’s practice of entering into fixed-price contracts for a large portion of its sales as well as

rising corn costs during the period of investigation. Although corn prices did rise during the period of

investigation, they began rising in 2006, well before the domestic industry’s average COGS exceeded its

average net sales value in 2007. The domestic industry was unable to secure adequate price increases for

its 2007 contracts in the final quarter of 2006 due to pricing pressure from the large and increasing

volume of subject imports from Canada and China.246

Respondents claim that the industry’s poor aggregate financial performance resulted to a

significant degree from ***.247 We reject this argument for several reasons. First, although ***.248

Second, as directed by the statute, the Commission focuses on the domestic industry “as a whole,” not on

individual firms in the industry; there will inevitably be differences between members of the domestic

industry in regard to cost structure and profits. Third, we do not find the hedging practices of *** or any

other domestic producer to be inadequate. At the Commission’s request, domestic producers provided

detailed information on their costs and hedging practices.249 All domestic producers hedged their corn

prices to some degree.250 The Commission also verified the data reported by ***.251 Contrary to

respondents’ contention, ***.252

Finally, we also reject respondents’ contention that any problems the domestic industry has

experienced are due to competition among the three domestic producers. As discussed in detail above in

section V.D (Price Effects), record evidence shows significant pricing pressure from cumulated subject

imports from Canada and China. Despite intra-industry competition among the three domestic producers,

the domestic industry was able to negotiate significant price increases for 2009 contracts after the

discipline of Commerce’s preliminary margins diminished the subject imports’ pricing pressure. Thus,

we have not attributed injury from intra-industry competition to the subject imports.
37

Consequently, the record in these investigations indicates a sufficient causal nexus between the

subject imports and the condition of the domestic industry and thus demonstrates material injury by

reason of subject imports. We therefore conclude that subject imports have had a significant adverse

impact on the domestic industry.

CONCLUSION

For the reasons stated above, we find that an industry in the United States is materially injured by

reason of imports of citric acid and certain citrate salts from Canada and China that Commerce found to

be sold at less than fair value and imports from China that Commerce found to be subsidized by the

Government of China.

 1

 We join the Commission’s Views with respect to domestic like product, domestic industry, negligibility,

cumulation for purposes of the Commission’s material injury analysis, and conditions of competition. 

 2

 CR at II-2, PR at II-2.

 3

 CR/PR at Table II-2.

 4

 For subject imports from Canada, *** percent were sold to end users under contract, as were 60.4 percent of

subjects from China. CR at V-7, PR at V-5.

 5

 CR at V-7, PR at V-5.

 6

 CR at V-7, PR at V-5. Among industry participants, the share of total sales made by long-term contract varied

somewhat. Cargill reported selling *** percent of its citric acid by long-term contract, Tate & Lyle reported ***

percent, and ADM *** percent. Id. 

 7

 CR at V-7, PR at V-5. 

39

SEPARATE AND DISSENTING VIEWS OF CHAIRMAN SHARA L.

ARANOFF, VICE CHAIRMAN DANIEL R. PEARSON, AND COMMISSIONER

DEANNA TANNER OKUN 

Based on the record in these final phase investigations, we find that an industry in the United

States is not materially injured or threatened with material injury by reason of imports of citric acid and

certain citrate salts from Canada and China that have been found to be sold in the United States at less

than fair value (“LTFV”) and imports of citric acid and certain citrate salts from China that have been

found to be subsidized by the Government of China. 

I. NO MATERIAL INJURY BY REASON OF THE SUBJECT IMPORTS FROM CANADA

AND CHINA1

A. Additional Conditions of Competition

The U.S. market. The U.S. market for citric acid is relatively concentrated and dominated by end

users. The five largest responding purchasers *** accounted for 48.3 percent, and the 17 largest

purchasers accounted for 66.9 percent, of apparent U.S. consumption between 2006 and 2008.2

 Four of

the top five, and eight of the top ten, leading purchasers were end users rather than distributors. Food and

beverage producers dominate the ranks of the high-volume end user purchasers.3

 Nearly 95 percent of the

domestic industry’s sales were made to end users, virtually all by long-term contract, with the remaining

five percent sold to distributors generally under contract. While the majority of subject import sales by

volume also were made to end users, a significant volume of subject imports from China were sold to end

users on the spot market compared with either the sales for the domestic product or subject imports from

Canada.4

 Only nonsubject imports were more likely to be sold to distributors and to be sold on the spot

market as well.5

Domestic sales of citric acid by the domestic industry were overwhelmingly made by long-term

contracts, typically 12 months in duration coinciding with the calendar year. For the U.S. industry as a

whole, long-term contract sales accounted for approximately 99 percent of the quantity of citric acid

pricing products 1, 2, and 3 sold over the period of investigation.6

 While the majority of subject imports

were sold by contract – *** percent for subject imports from Canada, and 60 percent for imports from

China – the terms of these contracts were both short-term (reportedly 1 to 9 months) and long-term (12

months or longer).7

 

Negotiations for the high-volume long-term contracts typically occur in the last quarter of the

previous year. Domestic producers prefer to book as much of their productive capacity into these
 8

 CR at V-11, citing Tr. at 28-29, PR at V-7.

 9

 CR at V-11, PR at V-7.

 10 CR at II-20 and II-21, PR at II-; see also CR/PR at Table D-1 (Major U.S. Purchasers’ Bid Information which

provides information on multiple sourcing and domestic competition for large contracts).

 11 JBL prehearing brief at 31-32. 

 12 CR/PR at Table VII-7. 

 13 CR at VII-5, n. 6 and Table VII-7. Respondents argue that the Government of China’s recent environmental

protection policies caused rapid consolidation of producers of citric acid and citrate salts in China. See, e.g., Conf.

Tr. at 131; Chinese Respondents’ Postconference Br. at 1.

 14 CR/PR at Table VII-7.

 15 CR at VII-14, PR at VII-9.

 16 CR at VII-14, PR at VII-9.

 17 CR at VII-15, PR at VII-9.

 18 CR at II-8 - II-10, V-43 ***, V-45 ***, V-47-V-49 ***, PR at II-4-II-5, V-19; see also Domestic producers’

posthearing brief at Exh. 3, pp. 29-31.

 19 19 U.S.C. § 1677(7)(C)(i).

40

contracts as possible, and domestic producers regard these high-volume customers as having “tremendous

negotiating leverage.”8

 The members of the domestic industry compete fiercely for these contracts.9

The high-volume end users generally prefer buying from domestic producers but all divide their

purchases among multiple sources.10 These high-volume end user purchasers also exhibit marked

preferences for buying product under contracts of a year or more. ***.11

Citric acid supply. Over the last several years the worldwide citric acid industry has gone

through some fairly significant changes. The vast majority of the world’s citric acid productive capacity is

in China, the European Union (EU), and the United States.12 While the total capacity in China increased

significantly over the period of investigation, the Chinese industry has been substantially consolidated

since 2002, with the number of firms allegedly falling from over 100 to 20.13 Nonetheless, Chinese

capacity utilization remained at relatively high levels over the period of investigation and reportedly was

88.3 percent in 2008.14 In the EU, Tate & Lyle closed a citric acid facility in the United Kingdom in

2007, and ADM closed a facility in Ireland in 2005.15 All of the citric acid capacity in Central and South

America is controlled by the petitioners.16 Finally, the industry in Japan is now ***.17

Citric acid rarely accounts for a significant portion of the finished products in which it’s used, but

it is a vital component, and end users cannot afford significant interruptions in supply. While the parties

are divided, the record suggests that the citric acid market experienced tightness of supply during the

period of investigation, particularly in 2008.18 Domestic producers claim that there was no shortness of

supply apart from disruptions caused by reactions to the antidumping duty investigation filed in the EU in

2007 and by reactions to this action. Respondents argue that the global market for citric acid has been

tight regardless of any of these investigations.

B. Volume of the Subject Imports

Section 771(7)(C)(i) of the Act provides that the “Commission shall consider whether the volume

of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to

production or consumption in the United States, is significant.”19

We concur with the Commission majority that the absolute volume of cumulated subject imports

is significant. Subject imports were in the U.S. market in substantial volumes throughout the period of

investigation, never accounting for less than *** of the market. While the increase in the volume of
 20 CR/PR at Table C-1.

 21 CR/PR at Table C-1.

 22 CR/PR at Table C-1.

 23 CR at V-7, PR at V-5. Only five percent of domestic industry sales were to distributors whereas *** percent of

total sales of subject imports from Canada and 14.0 percent of total sales of subject imports from China were to

distributors. Id.

 24 19 U.S.C. § 1677(7)(C)(ii).

 25 CR/PR at Table II-7.

 26 CR/PR at Table II-7. Less than half of responding importers thought that non-price factors were never

significant, and a majority of those responding indicated that non-price differences were always or frequently

significant when comparing the domestic like product to subject imports from China or subject imports from Canada

to subject imports from China. Purchasers were also far less likely than domestic producers to report non-price

differences as being never important. Purchasers, like importers, were more likely to find non-price differences

always or frequently important when comparing the domestic like product to subject imports from China and when

(continued...)

41

subject imports was at a rate higher than the increase in apparent U.S. consumption, market share gained

by subject imports came largely at the expense of nonsubject imports rather than the domestic product. 

Subject imports’ market share increased from *** percent in 2006 to *** percent in 2008 while the

domestic industry’s market share declined only from *** percent in 2006 to *** percent in 2008.20 The

increase in subject import volume, therefore, occurred at a time when demand was increasing and the

domestic industry was itself increasing both production and shipments, and substantially reducing its endof-period inventories in absolute terms and as a share of shipments.21 By 2008, the domestic industry was

operating at 91.7 percent capacity utilization.22 The record suggests that the industry was operating close

to its practical capacity in 2008, and apparently suffering some capacity constraints, as customers began

to experience delays and the domestic industry declined to take on additional business.

The record also suggests some separation in the markets served by the domestic industry and the

subject imports. The domestic industry focused its marketing efforts on securing high-volume contracts

with the largest end user purchasers in order to fill its capacity with as few customers as possible. This

strategy meant that the domestic industry devoted very little of its production to distributor sales, a niche

filled by subject and nonsubject imports.23

For these reasons, we find that the volume of subject imports is significant both in absolute terms

and relative to consumption and production in the United States.

C. Price Effects of the Subject Imports

Section 771(C)(ii) of the Act provides that, in evaluating the price effects of subject imports, 

the Commission shall consider whether – (I) there has been significant price underselling

by the imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses

prices to a significant degree or prevents price increases, which otherwise would have

occurred, to a significant degree.24

Producers and importers gave mixed responses as to the importance of price in purchasing

decisions. All three domestic producers responded that factors other than price were never a significant

factor in their sales of subject product.25 However, a majority of responding importers and purchasers

indicated that non-price differences were always or frequently significant when comparing the domestic

like product to subject imports from China or subject imports from Canada to subject imports from

China.26
 26 (...continued)

comparing subject imports from Canada to subject imports from China. Id.

 27 See, e.g., Citric Acid and Certain Citrate Salts from Canada and China, Invs. Nos. 701-TA-456 and 731-TA1151-1152 (Preliminary), USITC Pub. 4008 at 26-28 (June 2008). In the preliminary phase of these investigations,

product-specific pricing data were gathered for five products, but the gathered data were not divided by method of

sale or type of customer. The product-specific data covered a significant share of shipments in the U.S. market over

the period of investigation, including 57.6 percent of domestic shipments, *** percent of shipments of subject

imports from Canada, and 58.4 percent of subject imports from China in 2007. The product-specific pricing data

gathered in the preliminary phase showed subject imports underselling the domestic like product in only 12 of 92

quarterly comparisons. Margins of overselling by subject imports were significant, ranging from five percent to over

120 percent, while underselling margins for subject imports were modest.

 28 In the final phase of these investigations, quarterly pricing data was collected on the following five products: 

two dry citric acid products, one citric acid in solution product, one sodium citrate product, and one potassium citrate

product. The citric acid products for which specific quarterly pricing data were gathered in these final investigations

are not the same as those surveyed in the preliminary phase. The preliminary data included no solution products; the

final phase data included one solution product but excluded all fine granular products. CR at V-17 and n.34, PR at

V-11 and n.34.

 29 CR at V-17, PR at V-11. 

 30 Calculated from CR/PR at Tables V-4-V-6. 

 31 Calculated from CR/PR at Tables V-4-V-6. There were no reported sales of subject imported product 3 by

contract to distributors. Id. at CR/PR at Table V-6. 

42

The product-specific pricing data gathered in the final phase of these investigations show more

individual instances of underselling by subject imports than did the preliminary data.27 The data,

however, also reveal that most underselling by subject imports occurred in segments where domestic sales

volumes were generally modest.

In the final phase of these investigations, staff gathered quarterly pricing data on five products.28

For products 1-3, the pricing data were gathered by spot sales to end users, contract sales to end users,

spot sales to distributors, and contract sales to distributors. For products 4 and 5, data were gathered by

sales to end users and sales to distributors. As in the preliminary phase, these surveyed products

accounted for a significant share of shipments. These five products accounted for approximately 56.3

percent of domestic shipments, *** percent of U.S. shipments of subject imports from Canada, and 60.0

percent of U.S. shipments of subject imports from China.29

Aggregating the pricing data for these products yielded 231 quarterly comparisons, with subject

imports underselling in 139, or 60 percent, of those comparisons. But aggregating the quarterly

comparison results obscures some significant differences in volume and underselling. Splitting pricing

data for products 1-3 into four categories yielded far more quarterly comparisons and also more

underselling. Subject imports were significantly more likely to undersell the domestic like product in

spot sales than in contract sales. For product 1 spot sales to end users, subject imports undersold the

domestic like product in 18 of 24 quarterly comparisons. But for sales of product 1 made under contract

to end users, subject imports undersold the domestic like product in only four of 24 quarterly

comparisons.30 Similar disparities were present when comparing spot and contract sales to distributors as

well.31

More striking, however, were the differences in the volumes in the different channels of

distribution. Subject imports consistently undersold the domestic like product in product 1 sales on the

spot market to end users and consistently oversold the domestic like product in contract sales to end users. 

But the volume of sales in these markets was quite disparate, particularly for the domestic like product. 

The domestic industry reported pricing information for *** pounds of product sold to end users over the

period of investigation. The vast majority of product 1 end user sales reported by the domestic industry,
 32 Calculated from CR/PR at Table V-4.

 33 Calculated from CR/PR at Table V-4. There was also a significant difference in concentration in this segment. 

Sales on the spot market to distributors accounted for only *** percent of domestically produced product 1 sold to

distributors, while spot sales to distributors accounted for *** percent of reported sales of subject imported product 1

from Canada and *** percent of subject imported product 1 from China. Id.

 34 Calculated from CR/PR at Tables V-5 and V-6. 

 35 Calculated from CR/PR at Tables V-7 and V-8.

 36 Domestic producers’ posthearing brief at Exh. 1, pp. 5-6.

 37 CR at V-11 and Table D-1, PR at V-7 and Table D-1.

 38 Domestic producers’ posthearing brief at Exh. 1, pp. 5-6.

 39 Domestic producers’ volume arguments could be extended to explain underselling in the spot market, where

subject import volumes sometimes exceeded the volume of domestic sales. For example, for sales of product 1 to

end users on the spot market, total reported domestic sales were *** pounds over the period of investigation, versus

*** million pounds of subject imports. Calculated from CR/PR at Table V-4.

 40 Domestic producers’ posthearing brief at Exh. 1, p.5.

43

*** percent, were sold under contract, a market segment wherein subject imports were priced above the

domestic product in 20 of 24 comparisons. For end user sales on the spot market, reported domestic sales

were only *** pounds, *** percent of reported product 1 sales to end users. This market segment,

accounting for such a minuscule share of product 1 domestic shipments, much less total reported productspecific shipments, nonetheless accounted for a significant portion of underselling instances, with

underselling by subject imports in 18 of 24 quarters.32

Similar patterns and disparities can be seen in other product/channel segments as well. For

product 1 sales to distributors, reported shipments by the domestic industry were heavily concentrated by

contract (***), but most of the reported underselling by subject imports occurred in sales on the spot

market (23 of 24 quarters).33 For products 2 and 3 as well, instances of underselling by subject imports

occurred most frequently in the spot market, but domestic sales volumes were concentrated in the contract

sales market.34 Product-specific pricing data for products 4 and 5 were not reported by contract and spot,

but domestic shipments were concentrated in the end user segment while most underselling occurred in

the distributor segment.35

Domestic producers have put forward several arguments as to why the significant overselling by

subject imports in the contract sales segment should be ignored. Domestic producers point out that the

average volume sold by the domestic industry to the largest producers was *** pounds, while the average

volume sold by importers to the largest producers was ***, and even this figure overstates the average

volume of imports sold to the largest customers, which is actually closer to ***.36 As discussed above,

domestic producers prefer these high-volume contracts to end users but they also indicate that these

purchasers have “tremendous negotiating leverage” and that the domestic producers compete fiercely for

these contracts.37 The larger volumes sold in these contracts may affect the price and thus skew this

pricing data reducing the U.S. prices relative to that of imports.38 The smaller volumes of subject imports

in these segments and the frequency of lower prices by the domestic industry suggest that purchasers in

these market segments prefer domestic product and that much of the competition in these segments is

between the domestic producers.39

Domestic producers have also argued that most underselling by subject imports occurred in 2008,

and that underselling margins prior to 2008 were too small to draw conclusions.40 In a market as

described by domestic producers, however, where citric acid is largely a commodity product with intense

price competition, we would be hesitant to entirely dismiss even modest margins. Here, however, the

average underselling margin by subject imports was 12.7 percent, while the average overselling margin
 41 CR/PR at Table V-10.

 42 Domestic producers have argued that the pricing data for 2005, gathered during the preliminary phase of these

investigations, ought to be considered as well. We decline to do so, as the data were not gathered for the same

products at the same level of detail.

 43 Commission staff also gathered product-specific pricing data from purchasers, CR/PR at Tables D-2-D-4, as

well as information on specific bids and awards, CR/PR at Table D-1. The purchaser pricing data suggest more

frequent underselling, even in contract sales, than is apparent in the producer/importer pricing data. We have

reviewed these data and found them useful. However, we do not rely on the purchasing pricing data in drawing

conclusions about underselling or overselling. Here, we have good coverage of the market through our

producer/importer pricing data, and better coverage than is available in the purchaser pricing data. The

producer/importer pricing dataset has also benefitted from careful review and revision by Commission staff and the

parties to ensure that only appropriate sales were included in the dataset; time and resources preclude such review to

ensure that only the appropriate products at the appropriate level of trade were included in the purchaser pricing data.

 44 Domestic producers’ posthearing brief at Exh. 1, pp. 5-6.

 45 We note that the product-specific pricing data for domestic sales to end users show very little movement in

price within a given calendar year. See CR/PR at Tables V-4-V-8.

 46 Domestic producers have conjectured that the pendency of the EU petition prompted concerns that similar

actions would be filed in the United States. However, there is no evidence on the record that such concerns changed

behavior on the part of importers or purchasers. Import volume increases in 2008 were similar to volume import

increases in 2007 and there is no other record evidence that volumes [or prices] were reacting to the EU petition.

 47 CR/PR at Table C-1 (AUVs for subject imports) and Tables V-4, V-5, and V-7.

 48 In 2008, *** percent of Canada’s total shipments of citric acid were exported to the United States, *** percent

of its shipments were to its home market, and *** percent of its shipments were exported to other countries,

principally to ***. CR/PR at Table VII-1.

44

was 15.0 percent.41 Moreover, in the segments of the market with the highest volumes, such as product 1

contract sales to end users, overselling by subject imports tended to be spread out throughout the period

of investigation and not concentrated in the later quarters of the period of investigation.42 43 Based on the

record evidence in the final phase investigation, we find that there has not been significant underselling of

the domestic like product by subject imports.

We do not see evidence of price depression. All parties agree that prices for both the domestic

like product and subject imports rose significantly in 2008. Domestic producers argue that the 2008 price

increases should be discounted, in part because of the pendency of these investigations and because the

antidumping duty investigation in the EU inflated U.S. prices.44 Although the statute permits us to

discount the significance of post-petition data, given the facts of record, we decline to attribute the 2008

price increases to the pendency of these investigations. These petitions were filed in April 2008. Given

that the significant majority of all domestic sales are made under long-term contract with prices

negotiated in the fourth quarter of the preceding year, these investigations were not pending at the time

that 2008 prices received by the domestic industry were largely determined.45 Nor is there evidence on

the record that the possibility of these petitions being filed was known or discussed within the industry.46

Domestic producers have also argued that price increases reflect the filing of an EU antidumping duty

investigation in 2007, and should be discounted. But product-specific data show price increases in 2007,

and, because of the preponderance of long-term contracts in the market, most of these 2007 price

increases would have been negotiated in 2006, well before the EU action began.47 Furthermore, we see

little evidence that the EU investigation significantly affected the volume or pricing of imports into the

United States, particularly since volume and pricing for subject imports from Canada, exempt from the

EU investigation and not likely to replace Chinese imports in the EU market, followed trends similar to

subject imports from China.48
 49 Compare Domestic prehearing brief at 55.

 50 CR/PR at Table C-1.

 51 Domestic producers’ posthearing brief at Exh. 7, pp. 1-2, and Exh. 20.

 52 CR/PR at V-1 and V-2. Petitioners reported that their contracts did not include price escalation clauses during

the 2006 to 2008 period and that until 2007, when raw material costs increased dramatically, the lack of escalations

had not been a problem. ***. Id.

 53 Domestic producers have argued that substantial price increases gained for 2009 contracts indicate that subject

imports have suppressed prices and that only the pendency of these investigations allowed the industry to win such

substantial price increases. We are hesitant to draw significant conclusions on the basis of pricing data alone, but we

also note that we found price increases occurring over most of the period of investigation, though, because of the

market’s own contract cycle, at a lag from price increases. We view the 2009 price increases as consistent with the

pattern that emerged in 2007 and 2008.

We also note that the domestic industry has continued to devote a significant portion of its shipments to

export markets. AUVs for its exports increased over the period of investigation at essentially the same rate as AUVs

for its domestic shipments, and the industry apparently expects continued increases in this market. This pattern

indicates that the domestic industry finds increased citric acid prices to be a market-wide phenomenon rather than

one local to the U.S. market and caused largely by these investigations. 

 54 ***.

 55 CR/PR at Table D-1.

45

We find that while there is evidence of price suppression, the record does not indicate that subject

imports were the reason for the industry’s inability to raise prices more rapidly.49 The industry’s unit cost

of goods sold jumped by 5.1 percent between 2006 and 2007, unit sales values were flat, and the

industry’s COGS/sales ratio went from 98.6 percent in 2006 to 103.6 percent in 2007. The industry was

able to raise prices in 2008, but its COGS/sales ratio remained at an anemic rate of 97.9 percent.50 As

noted above, prices for a significant portion of the domestic industry’s sales are set as much as a quarter

before the beginning of the calendar year, and prices for those contract sales show very little movement

during the calendar year. The record suggests that the rapid increase in raw materials costs was not

adequately anticipated or prepared for at the time 2007 contracts were negotiated.51 By the time 2008

contracts were negotiated, the run-up in corn prices was widely known and domestic producers changed

their contracts to incorporate price escalation clauses.52 For 2008 calendar year sales, before these

petitions were filed, the domestic industry was able to gain significant price increases despite the presence

of increased volumes of subject imports in the U.S. market, and prices for subject imports rose as well.53

In considering price suppression, we have also considered the effect of intra-industry competition

in preventing price increases. ***.54

Commission staff were able to gather data on specific bids and awards for citric acid from some

of the U.S. market’s ***.55 The bidding data indicate that large purchasers sought bids from multiple

sources on these contracts and not infrequently sought additional rounds of bidding. But the bidding data

also show that the lowest bidder rarely secured the total volume of a contract. *** split each of its three

largest purchases between two suppliers, *** split its largest purchase between two sources, ***, and ***

split its largest purchase among four suppliers. The general practice among these high-volume purchasers

was to divide up the contract purchases relatively evenly, rather than awarding a significant majority to

the lowest bidder. The contract data also show that domestic producers were participants in most of the

bidding processes, that they competed strongly for these contracts, and underbid both each other and

subject imports. 
 56 CR/PR at Tables V-11 and V-12.

 57 See, e.g., CR at V-45 and V-46 (***).

 58 See, e.g., CR at V-43 (***), V-44 (***), V-47 (***) and V-48 (***).

 59 CR/PR at Table D-1.

 60 Commerce estimated a dumping margin of 23.21 percent for Canadian respondent JBL and all others, and

margins ranging from 94.61 percent to 129.08 percent for named China respondents, as well as a margin of 156.87

for all others. CR at I-6-I-7, PR at I-4-I-5.

 61 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

considers, in addition to imports, other factors that may be contributing to overall injury. While these factors, in

some cases, may account for the injury to the domestic industry, they also may demonstrate that an industry is facing

difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”) SAA at 885.

 62 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

 63 CR/PR at Table C-1.

46

We have also considered the allegations of lost sales and lost revenues.56 Purchaser responses to

these allegations were generally not supportive.57 Some purchasers did indicate that imports were lowpriced players in the U.S. market or that they switched to imports for price-based reasons.58 But other

responses also indicated that purchasers had in fact switched from one domestic producer to another or

had struggled with domestic availability, particularly in 2008. 

The record indicates that overselling by subject imports, not underselling, was the norm in the

market segments most important to the domestic industry; that prices began to rise even before any unfair

trade investigations were begun either in the United States or in the EU; that the industry’s apparent pricecost squeeze was not well correlated with trends in import volumes, pricing, or underselling; that

competition is intense among the domestic industry for high-volume contracts to end users and shifts by

these purchasers from one domestic producer to another were not uncommon during the period of

investigation.59 For these reasons, we do not find that subject imports had significant adverse effects on

domestic prices.

D. Impact of the Subject Imports60

Section 771(7)(C)(iii) provides that the Commission, in examining the impact of the subject

imports on the domestic industry, “shall evaluate all relevant economic factors which have a bearing on

the state of the industry.”61 These factors include output, sales, inventories, capacity utilization, market

share, employment, wages, productivity, profits, cash flow, return on investment, ability to raise capital,

research and development, and factors affecting domestic prices. No single factor is dispositive and all

relevant factors are considered “within the context of the business cycle and conditions of competition

that are distinctive to the affected industry.”62

The domestic industry saw improvement in several key metrics over the period of investigation. 

Production increased by 6.8 percent between 2006 and 2008; capacity utilization rose from 85.8 percent

to 91.7 percent over the same period; U.S. shipments increased by 9.0 percent and export shipments by

16.8 percent. Inventories at the end of 2008 were down 42.5 percent from the end of 2006. The number

of production and related workers declined by 4.6 percent, but productivity rose by 11.8 percent. Gross

profit in 2008 was nearly double that in 2006.63

Despite these improvements, the industry’s financial position was weak over the period of

investigation. The industry recorded losses at the operating level in each of the three years, though losses
 64 CR/PR at Table C-1.

 65 CR/PR at Tables VI-5 and VI-6.

 66 Domestic producers’ posthearing brief at Exh. 7.

 67 Subject imports gained *** percentage points of U.S. market share from 2006 to 2008 whereas the domestic

industry lost *** percentage points and non-subject imports lost *** percentage points of U.S. market share for the

same period. CR/PR at Table C-1.

 68 CR/PR at Table C-1.

 69 CR/PR at Table VI-2.

 70 Calculated from CR/PR at Table VI-2.

 71 Calculated from CR/PR at Table VI-2.

47

in 2008 were significantly smaller.64 The industry’s capital expenditures in 2008 were lower than in 2006

or 2007, and it has consistently had negative returns on its assets.65 Moreover, we recognize that these

losses have occurred at a time when import volume increased.

Nevertheless, we do not find a sufficient causal link between the presence and behavior of subject

imports in the market and the current condition of the domestic industry. As an initial matter, we note

that, according to information submitted by domestic producers, this is an industry that has been marked

by falling prices and returns for at least a decade, well before significant volumes of subject imports

entered the U.S. market.66 Focusing on the period of investigation, we do not find clear correlations

between trends in subject import volumes and prices and the performance of the domestic industry. As

demand increased over the period of investigation, subject import volume increased as did the domestic

industry’s shipments and production. Increases in subject imports’ market share were largely at the

expense of nonsubject imports.67 Moreover, by 2008, the domestic industry was operating at *** percent

capacity utilization, with evidence that it was experiencing some capacity constraints (e.g., delays in

shipments and declining to take on additional business).

We recognize that subject import volume and market share rose from 2006 to 2007 (*** percent

and *** percentage points, respectively), when the domestic industry suffered its worst losses of the

period of investigation.68 However, subject import volume and market share increased again from 2007

to 2008 (*** percent and *** percentage points, respectively), as the domestic industry recorded

increased production, capacity utilization, sales, and prices and its best financial performance of the

period of investigation. 

We have also noted some differences in market concentrations and the general trend of subject

imports overselling, not underselling, the domestic like product in the domestic industry’s preferred

market segments. Prices for the domestic like product rose in tandem with rising import volumes. The

record suggests that the domestic industry might have suffered a cost-price squeeze in 2007, but the

industry’s situation improved in 2008 even as import volume rose.

As discussed above, the record indicates that all three domestic producers are concentrated in the

same portion of the market: high-volume sales by contract to major end users. While we consider the

industry as a whole, variations in individual market participants’ sales and performance demonstrate that

the overall industry’s performance was affected by intra-industry competition. Domestic producers

rationally seek to fill as much as their productive capacity as possible through as few contracts as possible

with high volume purchasers with fairly predictable needs. ***.69 ***.

***.70 ***.71 

The record suggests that concentration by the domestic industry in end user contract sales, the

contract cycle particular to this industry, and price leverage on the part of high-volume end user

purchasers made it difficult for the domestic industry to raise prices quickly enough to keep pace with the

significant increase in raw material costs. Moreover, these increases in raw material costs were

unanticipated and not prepared for during 2007 contract negotiations which did not contain price
 72 19 U.S.C. §1677(7)(F)(ii).

 73 19 U.S.C. §1677(7)(F)(ii).

 74 19 U.S.C. §1677(7)(F)(ii). Statutory threat factors (VII) is inapplicable, as no imports of agricultural factors

are involved. Id.

 75 19 U.S.C. § 1677(7)(H).

48

escalation clauses. The industry’s general difficulties were compounded by ***. But the record also

indicates that the industry was able to begin recouping its higher costs. By the start of the 2008 contract

cycle, before these petitions had been filed and while subject import volumes were still rising, the

domestic industry had won significant price increases along with increases in shipment volumes that

represented a peak for this investigation period and significantly decreased inventory levels.

We find that the record does not indicate a causal nexus between subject import trends and the

domestic industry’s performance. Therefore, we do not find that the domestic industry is materially

injured by reason of subject imports.

II. NO THREAT OF MATERIAL INJURY BY REASON OF SUBJECT IMPORTS FROM

CANADA AND CHINA 

A. Legal Standards

Section 771(7)(F) of the Act directs the Commission to determine whether the U.S. industry is

threatened with material injury by reason of the subject imports by analyzing whether “further dumped or

subsidized imports are imminent and whether material injury by reason of imports would occur unless an

order is issued or a suspension agreement is accepted.”72 The Commission may not make such a

determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as a

whole” in making its determination whether dumped or subsidized imports are imminent and whether

material injury by reason of subject imports would occur unless an order is issued.73 In making our

determination, we consider all statutory threat factors that are relevant to this investigation.74

B. Cumulation

For purposes of determining if a threat of material injury exists, cumulation is discretionary. 

Under section 771(7)(H) of the Act, the Commission may cumulatively assess the volume and price

effects of subject imports from all countries as to which petitions were filed on the same day if the

requirements for cumulation for material injury analysis are satisfied.75 

As we have already found in our material injury cumulation analysis, in which we joined the

Commission’s Majority Views, none of the cumulation exceptions apply to these investigations, and there

is a reasonable overlap of competition among subject imports from Canada and China and the domestic

like product. 

In addition to that analysis, for purposes of assessing whether we should cumulate subject imports

from Canada and China for purposes of our threat of material injury analysis, we have considered the

volume and pricing trends exhibited by the subject imports. We find sufficient similarities in those

trends. Subject imports from both Canada and China increased over the period of investigation and

gained market share. As for pricing trends, AUVs for imports from both countries increased over the

period of investigation, and product-specific pricing data showed increases across most products over the

period of investigation. We exercise our discretion to cumulate subject imports from Canada and China

for purposes of our threat of material injury analysis. 
 76 CR/PR at Table VII-1.

 77 CR/PR at Table VII-1. Exports to the U.S. market as a share of total Canadian shipments were *** 2009 and

2010.

 78 CR/PR at Table VII-3. Chinese industry data are based on usable foreign producer questionnaire responses of

14 companies that reported collectively accounting for approximately 90 percent of Chinese exports to the United

States during the period of investigation. CR at I-4.

 79 CR/PR at Table VII-3. Chinese shipments to its home market as a share of its total shipments were 27.8

percent in 2008 whereas Chinese exports to the U.S. market as a share of China’s total shipments were 10.0 percent

in 2008. Id.

49

C. Analysis of Statutory Threat Factors

We have found the volume of subject imports in the U.S. market to be significant absolutely, but

we do not find a substantial increase in subject imports in the imminent future likely. Subject import

volume increased at a time when overall demand was increasing, and the domestic industry’s U.S. market

share remained large and only slightly changed over the period of investigation. 

Moreover, we do not find that the capacity and export trends of the industries in the subject

countries suggest a significant increase in subject import volume in the imminent future. The industry in

Canada reported *** increase in capacity over the period of investigation and ***. The industry operated

*** increasing capacity utilization rates throughout the period of investigation and ***, ***.76 The U.S.

market has been the primary focus of the industry in Canada and ***.77 Moreover, the share of shipments

exported to the United States has been *** over the period of investigation. Inventories were *** higher

at the end of 2008, but the increase in inventories was *** to overall shipments. 

While the industry in China experienced significant increases in capacity over the period of

investigation, more modest increases are projected for the near future.78 Furthermore, Chinese capacity

utilization rates were relatively high over the period of investigation, at a reported 88.3 percent in 2008. 

Inventories have grown significantly over the period of investigation and, at the end of 2008, were higher

than total shipments to the United States that year. The industry in China differs from the industry in

Canada in that the United States is not, and never has been, its primary market. The citric acid producers

in China serve a significant domestic market, where by 2008, shipments to the home market exceeded

shipments to the United States by a nearly 3-to-1 margin.79 This market is expected to continue to grow at

a high rate in the near future. Even with a strong home market, the industry in China exports significant

portions of its production. The EU has long been the industry’s primary export market. The recent EU

investigation limited access to this important market throughout the latter portion of the period of

investigation. However, recent data suggest that producers in China have been able to export to the EU

and obtain prices above those specified in the price undertaking. Unlike producers in the United States

and Canada, the industry in China does not use genetically modified organisms in its citric acid

production, and as such it has an advantage in shipping to the EU, where citric acid capacity remains well

short of demand. 

We recognize that combined, these two industries have available capacity and inventories

relatively significant to total shipments to the United States. Production capacity in the U.S. market is

well short of demand, and imports will continue to be necessary to meet or fill that demand. Imports from

Canada and China have long been part of the U.S. market and at significant volumes. 

The conditions of competition in this market also suggest that it would be difficult for subject

imports to gain significant additional volume in the U.S. market that would bring significant competition

with the domestic industry. As noted, the high-volume, end user contract sales are set in a relatively

narrow time frame, and this is the portion of the market where the domestic industry concentrates most of

its energy. The domestic industry already devotes virtually all of its domestic shipments to this share of

the market. Given current high levels of production, the domestic industry has little available additional
50

capacity for new customers and little motivation to increase its penetration of the markets that subject

imports currently dominate, namely spot sales and distributor sales.

We have already found that subject imports have not significantly impacted domestic prices. 

Subject imports generally oversold the domestic like product in the market segments dominated by the

domestic industry. Prices for subject imports rose along with raw material prices, as did prices for the

domestic like product. Prices for the domestic like product did not initially rise quickly enough to keep

up with significant raw material cost increases, leaving the industry in a cost-price squeeze in 2007, but

the record indicates that prices rose significantly in 2008, despite the presence of an increased volume of

subject imports. Intra-industry competition also has affected prices in the U.S. market. Pricing data from

2007 and 2008 indicate that the market has been adjusting to increased raw material costs and an apparent

tightness in supply, and the pricing adjustments have occurred despite increases in import volume and

apparent available capacity and inventories in the subject countries.

Accordingly, based on the record, we determine that the domestic industry producing citric acid

and certain citrate salts is not threatened with material injury by reason of subject imports from Canada

and China. 

III. CONCLUSION

For the reasons stated above, we find that the domestic industry producing citric acid and certain

citrate salts is not materially injured or threatened with material injury by reason of subject imports from

Canada and China sold at LTFV and subject imports from China subsidized by the Government of China.
 1

 A complete description of the imported product subject to these investigations is presented in the section

entitled The Subject Merchandise located in Part I of this report.

 2 Federal Register notices cited in the tabulation after the Commission’s scheduling of its final investigations are

presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on April 14, 2008, by Archer Daniels Midland

Co. of Decatur, IL (“ADM”); Cargill, Inc. of Wayzata, MN (“Cargill”); and Tate & Lyle Americas, Inc.

of Decatur, IL (“Tate & Lyle”), alleging that an industry in the United States is materially injured and is

threatened with material injury by reason of imports from Canada and China of citric acid and certain

citrate salts1

 that are allegedly sold in the United States at less than fair value (“LTFV”) and subsidized by

the government of China. Information relating to the background of these investigations is provided

below.2

Effective date Action

April 14, 2008

Petition filed with Commerce and the Commission; Commission institutes investigations

(73 FR 21650, April 22, 2008)

May 13, 2008 Commerce’s notice of initiation (73 FR 27492)

May 28, 2008 Commission’s preliminary determinations (73 FR 33115, June 11, 2008)

September 19, 2008 Commerce’s preliminary countervailing duty determination (73 FR 54367)

November 20, 2008

Commerce’s preliminary antidumping duty determinations (73 FR 70324)(Canada) and (73

FR 70328)(China)

November 20, 2008

Commission’s scheduling of its final phase investigations (73 FR 73955, December 4,

2008)

April 13, 2009

Commerce’s final antidumping and countervailing duty determinations (74 FR 16836,

16838, and 16843)

April 7, 2009 Commission’s hearing1

May 8, 2009 Commission’s vote

May 22, 2009 Commission’s determinations and views transmitted to Commerce

 1 A list of witnesses that appeared at the hearing is in app. B.
I-2

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission--

shall consider (I) the volume of imports of the subject

merchandise, (II) the effect of imports of that merchandise on

prices in the United States for domestic like products, and (III)

the impact of imports of such merchandise on domestic

producers of domestic like products, but only in the context of

production operations within the United States; and . . . may

consider such other economic factors as are relevant to the

determination regarding whether there is material injury by

reason of imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

In evaluating the volume of imports of merchandise, the

Commission shall consider whether the volume of imports of the

merchandise, or any increase in that volume, either in absolute

terms or relative to production or consumption in the United

States is significant.

. . .

In evaluating the effect of imports of such merchandise on

prices, the Commission shall consider whether . . . (I) there has

been significant price underselling by the imported merchandise

as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise

otherwise depresses prices to a significant degree or prevents

price increases, which otherwise would have occurred, to a

significant degree.

. . .

In examining the impact required to be considered under

subparagraph (B)(i)(III), the Commission shall evaluate (within

the context of the business cycle and conditions of competition

that are distinctive to the affected industry) all relevant

economic factors which have a bearing on the state of the

industry in the United States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share,

profits, productivity, return on investments, and utilization of

capacity, (II) factors affecting domestic prices, (III) actual and

potential negative effects on cash flow, inventories, employment,

wages, growth, ability to raise capital, and investment, (IV)

actual and potential negative effects on the existing development

and production efforts of the domestic industry, including efforts

to develop a derivative or more advanced version of the domestic
 3

 ***. JBL Canada, the sole Canadian producer, did not produce sodium citrate or potassium citrate during the

period of investigation. 

 4

 Appendix C, table C-2 displays data compiled regarding the U.S. citric acid market, table C-3 displays data

regarding the U.S. sodium citrate market, and table C-4 displays data regarding the U.S. potassium citrate market.

 5

 ***. 

I-3

like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Organization of the Report

Information on the subject merchandise, margins of dumping and subsidies, and domestic like

product is presented in Part I. Information on conditions of competition and other relevant economic

factors is presented in Part II. Part III presents information on the condition of the U.S. industry,

including data on capacity, production, shipments, inventories, and employment. The volume and pricing

of imports of the subject merchandise are presented in Parts IV and V, respectively. Part VI presents

information on the financial experience of U.S. producers. Information obtained for use in the

Commission’s consideration of the question of threat of material injury is presented in Part VII.

U.S. MARKET SUMMARY

The U.S. market for citric acid and certain citrate salts totaled *** dry pounds and approximately

*** in 2008. Currently, three firms produce citric acid and certain citrate salts in the United States. 

These firms are the petitioners, ADM, Cargill, and Tate & Lyle. ***, Jungbunzlauer Technology GmbH

& Co. (“JBL”) *** imported citric acid from Canada in 2008.3

 At least 31 firms have reported importing

citric acid and/or certain citrate salts from China since 2006.

U.S. producers’ U.S. shipments of citric acid and certain citrate salts totaled 403 million dry

pounds valued at $215 million in 2008, and accounted for *** percent of apparent U.S. consumption by

quantity (*** percent by value). U.S. imports from Canada totaled *** dry pounds valued at *** in 2008,

and accounted for *** percent of apparent U.S. consumption by quantity (*** percent by value). U.S.

imports from China totaled 194 million dry pounds valued at $118.3 million in 2008, and accounted for

*** percent of apparent U.S. consumption by quantity (*** percent by value). U.S. imports from all

other sources combined totaled 55.6 million dry pounds valued at $41.1 million in 2008, and accounted

for *** percent of apparent U.S. consumption by quantity (*** percent by value). Citric acid and certain

citrate salts are generally used as an acidulant, preservative, and flavor enhancer in food and beverage end

uses as well as an ingredient in many household and industrial detergents and cleaners.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C-1.4

 U.S.

industry data are based on the questionnaire responses of the three petitioning firms that accounted for all

U.S. production of citric acid and certain citrate salts in 2008. Data for U.S. imports from Canada are

compiled using the reported U.S. imports of JBL, the U.S. importer of Canadian product which accounted

for *** U.S. imports from Canada, ***.5

 Data for U.S. imports from China and nonsubject countries are

compiled using official Commerce statistics. Data regarding the Canadian industry are based on the

foreign producer questionnaire response of Jungbunzlauer Technology GmbH & Co. (“JBL Canada”),

which accounted for all Canadian export shipments to the United States in 2008. Data regarding the

Chinese industry are based on 14 foreign producer questionnaires. The responding foreign producers
 6

 The scope of the 2000 investigation consisted of citric acid and sodium citrate. The current investigations’

broader scope consists of those products, potassium citrate, and crude calcium citrate. 

 7 Citric Acid and Sodium Citrate From China, Inv. No. 731-TA-863 (Preliminary), USITC Publication 3277,

February 2000, p. 1.

 8

 Ibid., at p. 12.

 9 Ibid., pp. 14-15.

 10 Ibid., pp. 16-17.

 11 Also mentioned in the Commission’s prior investigation was a price-fixing conspiracy in the citric acid industry

that took place in the 1990s. ADM and Haarmann & Reimer pled guilty in October 1996 and January 1997,

respectively, to participation, along with two European producers, in a price-fixing conspiracy which the U.S. Justice

Department found to be in place as early as 1991. The guilty plea resulted in total fines of $100 million for the four

firms. ***. Also, several U.S. civil class action law suits were filed in 1996 and 1997 in which ADM agreed to pay

$85 million and Haarmann & Reimer agreed to pay $46 million to bottlers and food processors. In all, fines paid out

on the cases totaled over $200 million. In 1998, Haarmann & Reimer sold its entire worldwide citric acid business

to Tate & Lyle. Ibid., p. III-1, fn. 3. The Commission explicitly stated that it gave the price fixing “little weight” in

its determination “as it may have affected prices only for the early part of the investigation.” Ibid., p. 13, fn. 88.

 12 Notice of Final Determination of Sales at Less Than Fair Value: Citric Acid and Certain Citrate Salts from

Canada; 74 FR 16843, April 13, 2009.

 13 Citric Acid and Certain Citrate Salts from the People’s Republic of China: Final Determination of Sales at

Less Than Fair Value; 74 FR 16838, April 13, 2009.

I-4

estimate that they collectively accounted for approximately 90 percent of Chinese export shipments to the

United States during the period for which data were collected in the investigations.

PREVIOUS AND RELATED INVESTIGATIONS

Citric acid and certain citrate salts have been the subject of a previous Commission investigation.6

In 2000, in investigation No. 731-TA-863 (Preliminary), the Commission determined that there was no

reasonable indication that an industry in the United States was materially injured or threatened with

material injury by reason of imports from China that were allegedly sold at LTFV.7

 The Commission

determined that the volume of U.S. imports from China was not significant, stating that “Chinese imports

have not made significant inroads into sales made by the domestic industry to U.S. food and beverage

manufacturers {by far the largest market segment in the United States at the time}. Rather, the large

majority of subject imports compete with the domestic product only in the industrial use market, where

the subject imports have already increased their market share without a significant adverse impact on the

industry.”8

 Further, the Commission determined that the record did not indicate price depression or

suppression and that the U.S. industry was not adversely impacted by reason of U.S. imports from China.9

Finally, the Commission determined that there was no reasonable indication that the U.S. industry was

threatened with material injury by reason of the subject imports, noting that “Chinese producers of citric

acid and sodium citrate are currently operating at a high capacity utilization level” and that “Chinese

home market and third country market shipments have risen each year since 1996.”10 11

NATURE AND EXTENT OF SALES AT LTFV

On April 13, 2009, Commerce published notices in the Federal Register setting forth its final

determinations with regard to its antidumping investigations on citric acid and certain citrate salts from

Canada12 and China.13 The estimated weighted-average dumping margins (in percent ad valorem), as

reported by Commerce are summarized in the tabulation below:
I-5

Exporter Producer

Margin

(percent)

Canada

Jungbunzlauer Technology GmbH & Co. KG 23.21

All others 23.21

China

TTCA Co., Ltd. (a.k.a. Shandong TTCA

Biochemistry Co., Ltd.)

TTCA Co., Ltd. (a.k.a. Shandong TTCA

Biochemistry Co., Ltd.)

129.08

Yixing Union Biochemical Co., Ltd. Yixing Union Biochemical Co., Ltd. 94.61

Anhui BBCA Biochemical Co., Ltd. Anhui BBCA Biochemical Co., Ltd. 111.85

Anhui BBCA Biochemical Co., Ltd. China BBCA Maanshan Biochemical Corp. 111.85

A.H.A. International Co., Ltd. Yixing Union Biochemical Co., Ltd. 111.85

A.H.A. International Co., Ltd. Nantong Feiyu Fine Chemical Co., Ltd. 111.85

High Hope International Group Jiangsu

Native Produce IMP & EXP Co., Ltd.

Yixing Union Biochemical Co., Ltd. 111.85

Huangshi Xinghua Biochemical Co., Ltd. Huangshi Xinghua Biochemical Co., Ltd. 111.85

Lianyungang JF International Trade Co., Ltd. TTCA Co., Ltd. (a.k.a. Shandong TTCA

Biochemistry Co., Ltd.) 

111.85

Laiwu Taihe Biochemistry Co., Ltd. Laiwu Taihe Biochemistry Co., Ltd. 111.85

Lianyungang Shuren Scientific Creation

Import & Export Co., Ltd.

Lianyungang Great Chemical Industry Co.,

Ltd. 

111.85

Penglai Marine Bio-Tech Co. Ltd. Penglai Marine Bio-Tech Co. Ltd. 111.85

RZBC Imp & Exp. Co., Ltd./ RZBC Co., Ltd./

RZBC (Juxian) Co., Ltd.

RZBC Co., Ltd. 111.85

RZBC Imp & Exp. Co., Ltd./ RZBC Co., Ltd./

RZBC (Juxian) Co., Ltd.

RZBC (Juxian) Co., Ltd. 111.85

RZBC Imp & Exp. Co., Ltd./ RZBC Co., Ltd./

RZBC (Juxian) Co., Ltd.

Lianyungang Great Chemical Industry Co.,

Ltd. 

111.85

Shihezi City Changyun Biochemical Co., Ltd. Shihezi City Changyun Biochemical Co., Ltd. 111.85

Weifang Ensign Industry Co., Ltd. Weifang Ensign Industry Co., Ltd. 111.85

All others 156.87
 14 Commerce has determined that the current nature of the economy in China does not create obstacles to apply

the necessary criteria in the countervailing duty law and initiated a countervailing duty investigation against China. 

See Coated Free Sheet Paper from the People’s Republic of China: Amended Preliminary Affirmative

Countervailing Duty Determination, 72 FR 17484, 17486 (April 9, 2007).

 15 Citric Acid and Certain Citrate Salts from the People’s Republic of China: Final Affirmative Countervailing

Duty Determination; 74 FR 16836, April 13, 2009.

 16 In addition, Commerce listed the following alleged programs for which it deferred investigation to any future

administrative review: (A) Provision of TTCA’s Plant and Equipment for LTAR and (B) Provision of Land in

Zhuqiao Key Open Park for LTAR.

I-6

NATURE OF COUNTERVAILABLE SUBSIDIES

On April 13, 2009, Commerce published a notice in the Federal Register setting forth its final

determination with regard to its countervailing duty investigation on citric acid and certain citrate salts

from China.14 Commerce determined that the government of China is providing countervailable subsidies

to Chinese producers. The countervailable subsidy rates (in percent ad valorem), as reported by

Commerce, are presented in the following tabulation.15

Exporter/producer Margin (percent)

China

TTCA Co., Ltd. (a.k.a. Shandong TTCA Biochemistry Co., Ltd.) 12.68

Yixing Union Biochemical Co., Ltd. and Yixing Union Cogeneration Co., Ltd. 3.60

Anhui BBCA Biochemical Co., Ltd. 118.95

All others 8.14

Commerce made the following final determinations regarding specific programs of the

government of China found to have provided countervailable subsidies to producers of citric acid and

certain citrate salts in China:16

A. Government Policy Lending 

B. “Famous Brands” Program–Yixing City

C. Reduced Income Tax Rates to FIEs Based on Location 

D. “Two Free, Three Half” Program

E. Reduced Income Tax Rate for Technology or Knowledge Intensive FIEs 

F. Income Tax Credits on Purchases of Domestically Produced Equipment 

G. VAT Rebate on Purchases by FIEs of Domestically Produced Equipment 

H. VAT and Duty Exemptions on Imported Equipment 

I. Local Income Tax Exemption and Reduction Program for “Productive” FIEs 

J. Energy and Water Savings Grant

K. Provision of Land in the AEDZ for LTAR

L. Land Use Rights Extension in Yixing City 
I-7

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the scope of these investigations as follows:

All grades and granulation sizes of citric acid, sodium citrate, and potassium citrate in

their unblended forms, whether dry or in solution, and regardless of packaging type. The

scope also includes blends of citric acid, sodium citrate, and potassium citrate; as well as

blends with other ingredients, such as sugar, where the unblended form(s) of citric acid,

sodium citrate, and potassium citrate constitute 40 percent or more, by weight, of the

blend. 

The scope of these investigations also includes all forms of crude calcium citrate,

including dicalcium citrate monohydrate, and tricalcium citrate tetrahydrate, which are

intermediate products in the production of citric acid, sodium citrate, and potassium

citrate. 

The scope of these investigations does not include calcium citrate that satisfies the

standards set forth in the United States Pharmacopeia and has been mixed with a

functional excipient, such as dextrose or starch, where the excipient constitutes at least 2

percent, by weight, of the product. 

The scope of these investigations includes the hydrous and anhydrous forms of citric

acid, the dihydrate and anhydrous forms of sodium citrate, otherwise known as citric acid

sodium salt, and the monohydrate and monopotassium forms of potassium citrate. 

Sodium citrate also includes both trisodium citrate and monosodium citrate, which are

also known as citric acid trisodium salt and citric acid monosodium salt, respectively. 

Citric acid and sodium citrate are classifiable under 2918.14.0000 and 2918.15.1000 of

the Harmonized Tariff Schedule of the United States (“HTSUS”), respectively. 

Potassium citrate and crude calcium citrate are classifiable under 2918.15.5000 and

3824.90.9290 of the HTSUS, respectively. Blends that include citric acid, sodium citrate,

and potassium citrate are classifiable under 3824.90.9290 of the HTSUS. Although the

HTSUS subheadings are provided for convenience and customs purposes, the written

description of the merchandise is dispositive. 

Tariff Treatment

During the period of investigation, citric acid has been classifiable in the Harmonized Tariff

Schedule of the United States (“HTS”) under subheading 2918.14.00, sodium citrate under HTS
 17 Although HTS subheading 2918.15.50 is a residual or “basket” subheading covering salts and esters of citric

acid other than sodium citrate, during the preliminary phase of these investigations, petitioners contended that the

vast majority of U.S. imports entering under it are potassium citrate. In the event that crude calcium citrate were

imported into the United States, it may be classified under this subheading. However, the parties to these

investigations are unaware of any U.S. imports of crude calcium citrate. Conference transcript, p. 54 (Ellis).

 18 The scope of these investigations also included blends of citric acid and certain citrate salts classifiable in HTS

subheading 3824.90.92. This is a residual subheading for the heading “Prepared binders for foundry molds or cores;

chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of

natural products), not elsewhere specified or included.” During the preliminary phase of these investigations,

petitioners reported that they were unaware of any product within the scope of these investigations imported under

this subheading, but included it in the scope language in order to prevent circumvention. See Citric Acid and

Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and 731-TA-1151-1152 (Preliminary), USITC

Publication 4008, June 2008, p. 13, fn. 79. 

 19 During the preliminary phase of these investigations, crude calcium citrate was referred to as “unrefined

calcium citrate.” An interested party requested that Commerce clarify the definition and rename this product “crude

calcium citrate” in its scope language. See Citric Acid and Certain Citrate Salts from the People’s Republic of

China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty

Determination with Final Antidumping Duty Determination; 73 FR 54367, September 19, 2008.

 20 Petition, pp. 5-6.

 21 Petition, p. 6.

I-8

subheading 2918.15.10, and potassium citrate under HTS subheading 2918.15.50.17 Table I-1 depicts the

HTS subheadings under which citric acid and certain citrate salts are classified and their tariff treatment.18

Table I-1

Citric acid and certain citrate salts: Tariff treatment, 2009

HTS provision Article description

General1 Special2 Column 23

Rates (percent ad valorem)

2918 

 

 2918.14.00

 2918.15

 2918.15.10

 2918.15.50

Carboxylic acids with additional oxygen function and their

anhydrides, halides, peroxides and peroxyacids; their halogenated,

sulfonated, nitrated or nitrosated derivatives:

 Citric acid........................................

 Salts and esters of citric acid:

 Sodium citrate.............................

 Other..........................................

6.0

6.5

3.7

Free

Free

Free

39.5

42.0

25.0

 1

 Normal trade relations, formerly known as the most-favored-nation duty rate, applicable to China. 

 2

 Special rates are applicable to originating goods of Canada under the NAFTA. Other special rates apply to nonsubject

countries. China is not eligible for the special rates.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

Source: Harmonized Tariff Schedule of the United States (2009).

THE PRODUCT

Description and Applications

The imported products subject to these investigations are citric acid and certain citrate salts,

specifically sodium citrate, potassium citrate, and crude calcium citrate (“CCC”).19

Citric acid, sodium citrate, and potassium citrate are all available as odorless, translucent

crystals.20 These crystals are normally sold in three granulations: granular, fine granular, and powder.21
 22 Petition, p. 6. 

 23 Petition, p. 6.

 24 Petition, p. 6.

 25 Petition, p. 8.

 26 Petition, pp. 8-9.

 27 Petition, p. 6.

 28 Conference transcript, p. 65 (Poulos and Christiansen).

 29 Petition, p. 6.

 30 Conference transcript, p. 60 (Anderson).

 31 Petition, p. 9.

 32 Petition, p. 12.

 33 Petition, p. 12.

 34 Petition, p. 7.

 35 Conference transcript, p. 18 (Oakley).

 36 Petition, p. 8.

I-9

Citric acid is also available in solution.22 Purchasers can buy the dry product and put it into solution or

have an independent converter do it.23 Petitioners argue that the products have only minor molecular

differences which do not significantly alter their essential characteristics or uses.24

CCC is an intermediate form in the production of citric acid via the lime/sulfuric acid process.25

CCC can be shipped to another facility for further processing into refined citric acid.26

Citric acid is produced and sold in the U.S. market in both its dry and solution forms, and can be

easily and reversibly converted between these two forms. Whether dry or dissolved in water, the

product’s chemical properties are the same.27 The petitioners stated that the bulk of their shipments are in

the dry form, but they do ship as much as 25 percent in solution.28 Sodium citrate and potassium citrate

are sold in dry forms.29 According to the petitioners, the three products are used basically for the same

purposes, sold in the same markets, and produced in the same production facilities.30

Citric acid is produced as a white granular or crystalline powder with a strong acidic taste. It is

produced by the fermentation of glucose from a substrate such as corn, molasses, sweet potato, tapioca, or

wheat.31 Citric acid is produced both in anhydrous form and as a monohydrate. Both forms are isolated

and purified through successive recrystallizations. 

Sodium citrate is a white, granular crystalline powder with a pleasant acidic taste. Sodium citrate

is produced by mixing citric acid slurry with sodium hydroxide (or sodium carbonate) and then

crystallizing the resulting sodium citrate.32 Potassium citrate is produced by reacting citric acid slurry

with potassium hydroxide (or potassium carbonate).33

Citric acid, sodium citrate, and potassium citrate are chemical products used in the production and

formulation of a wide variety of foods, beverages, pharmaceuticals, and cosmetics as well as commercial

and household products including detergents and metal cleaners, and in textile finishing treatments and

other industrial applications. Citric acid is used in the food and beverage industry as an acidulant,

preservative, and flavor enhancer because of its tart flavor, high solubility, acidity, and buffering

capabilities.34 It is commonly used in carbonated and non-carbonated drinks, dry powdered beverages,

wines and wine coolers, jams, jellies, preserves, gelatin desserts, candies, frozen foods, and canned fruits

and vegetables.35 The use of citric acid in laundry detergents has increased because it has replaced

phosphate-based formulations and because more concentrated liquid detergents, which are increasing in

popularity, require more citric acid than do powdered detergents.36
 37 Petition, p. 8.

 38 Petition, p. 8.

 39 Petition, p. 8.

 40 Petition, p. 7.

 41 Conference transcript, p. 161 (Hsu).

 42 Conference transcript, p. 171 (Hsu).

 43 Petition, p. 12.

 44 Conference transcript, pp. 84-85 (Oakley and Staloch).

I-10

Sodium citrate, in addition to similar applications as citric acid, is used in cheese and dairy

products to improve emulsifying properties, texture, and melting properties and to act as a preservative

and aging agent.37 It also has pharmaceutical applications such as a diuretic and an expectorant in cough

syrup.38

Potassium citrate is used as an antacid, a diuretic, an expectorant, and as a systemic and urinary

alkalizer. In industrial applications, potassium citrate can be used in electropolishing and as a buffering

agent. In food and beverage applications, potassium citrate has been replacing sodium citrate as a means

of reducing sodium content in low- or no-salt products.39

Both petitioners and respondents state that citric acid and certain citrate salts are produced to

meet very high purity U.S. Pharmacopoeia (“USP”) or Food Chemical Codex (“FCC”) standards. The

Canadian and Chinese producers sometimes certify their products as complying with the British

Pharmacopoeia (“BP”) standards, which are very similar to those of the USP.40 The products must meet

these standards to be used in food and beverage or pharmaceutical applications. Both petitioners and

respondents stated that most of the world-class producers try to produce the highest quality product so

that it will pass USP or FCC standards since some of the largest customers are in the food and beverage

business. A respondent stated that in addition to high purity standards, other quality factors in the product

such as color, acidity level, consistency of pH level, and granulation or clumping play an important role

in the sale of the product. According to this witness, these factors, in addition to the FCC and USP

standards, determine in what market segment the subject product will be used.41 At the staff conference,

both petitioners and respondents referred to quality tiers in end-use markets for citric acid and certain

citrate salts. End uses in foods, beverages, and pharmaceuticals constitute an upper tier, while detergent

formulation and industrial uses make up a lower tier.

JBL Canada, the sole Canadian producer, manufactures only citric acid at its plant in Canada. It

does not produce any of the salts. It ships citric acid in both dry and solution forms.

The Chinese producers manufacture primarily citric acid. A witness at the conference stated that

China’s limited resources of the sodium and potassium compounds used to make the subject salts render

Chinese-produced salts less competitive in the U.S. market.42

Manufacturing Processes

Citric acid is produced in a two-stage process. In the first stage, sugars are fermented using a

fermenting organism such as molds or yeasts. In the second stage, the crude citric acid is recovered and

refined. Sodium citrate and potassium citrate are produced by reacting citric acid slurry with a solution

containing certain sodium or potassium compounds (e.g., sodium hydroxide or potassium hydroxide).43

The domestic producers stated during the conference that they produce sodium citrate and potassium

citrate using some of the same equipment and workers that are used for citric acid.44
 45 “Citric acid,” Kirk-Othmer Encyclopedia of Chemical Technology (John Wiley & Sons, New York, 1979),

Vol. 6, pp. 156-159.

 46 Petition, p. 9.

 47 Petition, p. 9.

 48 Petition, exh. I-2, Chemical Economics Handbook, “Citric Acid,” August 2006, pp. 10-11.

 49 Petition, p. 9.

 50 Petition, p. 10.

 51 Petition, p. 10. Staff telephone interview with ***. Email from ***.

 52 “Citric acid,” Kirk-Othmer Encyclopedia of Chemical Technology (John Wiley & Sons, New York, 1979),

Vol. 6, pp. 156-157. 

 53 Petition, p. 10.

 54 Petition, p. 9.

 55 Petition, p. 9.

 56 Petition, p. 10.

 57 Petition, pp. 10-11; Petitioners’ posthearing brief, exh. 2, p. 9.

I-11

 Modern, large-scale production of citric acid is achieved through fermentation.45 The

fermentation process involves the action of specific strains of organisms such as the Aspergillus niger

mold or the Candida lipolytica or Candida guilliermondii yeast upon a substrate.46 Once the substrate is

turned into glucose, it is fermented into crude citric acid by the organism.47 The yield of citric acid can be

optimized through the careful control of fermentation conditions, such as temperature, acidity or

alkalinity, dissolved air or oxygen, and the rate of stirring of the mixture. Each fermentation reaction is

done in batch in large tanks which hold several thousand gallons and takes approximately *** to achieve

a citric acid yield of *** percent, based on the weight of the sugar.48

Producers ferment the substrate by one of three different methods: “shallow pan,” “deep tank,”

or solid-state.49 Citric acid was originally produced using a shallow pan or liquid surface culture

technology, where microbial fermentation occurred on the surface of the liquid. Some smaller, older

Chinese plants may still use this technology.50 Most modern production of citric acid uses a deep tank or

a submerged culture process, where the reaction is constantly agitated or stirred with air in order to allow

the organism to grow throughout the mixture. The petitioners use only the deep tank method ***.51 The

submerged culture process is favored due to the economics of increased yields, although reaction

conditions must be more tightly controlled.52 According to petitioners, solid-state fermentation is used

only in Japan.53

Corn starch is the principal substrate in the United States, Canada, and China. U.S. producers

also use molasses.54 Some Chinese producers also use cassava, sweet potato, or wheat.55

The second stage of production, recovery and refining, is normally performed by one of three

common processes: the lime/sulfuric acid method, the solvent extraction method, or the ion exchange

method. All three of these processes are compatible with either the shallow pan or deep tank fermentation

processes.56

In the lime/sulfuric acid refining process, calcium hydroxide (lime) is added to the fermentation

broth to precipitate out calcium citrate slurry, the CCC that is also part of the scope. After the calcium

citrate is separated by filtration, it is washed to remove soluble impurities. The citrate is then mixed with

sulfuric acid to produce a citric acid/charcoal slurry and gypsum (calcium sulfate). The citric acid is then

purified through evaporation, crystallization, centrifugation, and drying. This process is used by ***

most Chinese producers.57

The second common refining method, used by ***, is the solvent extraction process. This

process does not involve the production of calcium citrate or gypsum. Instead, solvents separate the citric
 58 Petition, p. 11; Petitioners’ posthearing brief, exh. 2, p. 9.

 59 Staff telephone interview with ***. E-mail from ***.

 60 Petition, p. 11.

 61 During the preliminary phase of these investigations, at least one purchaser claimed that monosodium citrate is

not made by the U.S. producers and questioned why it is covered in the scope of these investigations. Petitioners

acknowledged that they do not produce monosodium citrate, but stated that they are able to do so. They also stated

that monosodium citrate can substitute for citric acid and trisodium citrate, and that the conversion from

monosodium citrate to either citric acid or trisodium citrate involves a relatively simple and inexpensive process. 

Petitioners’ posthearing brief, exh. 6, pp. 1-3.

 62 Petition, p. 12.

 63 Petition, p. 13.

 64 Conference transcript, pp. 23-24 (Oakley).

 65 During the preliminary phase of these investigations, crude calcium citrate was referred to as “unrefined

calcium citrate.” An interested party requested that Commerce clarify the definition and rename this product “crude

calcium citrate” in its scope language. See Citric Acid and Certain Citrate Salts from the People’s Republic of

China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty

Determination with Final Antidumping Duty Determination; 73 FR 54367, September 19, 2008.

 66 Conference transcript, p. 19 (Oakley). 

 67 Conference transcript, p. 19 (Oakley) and p. 87 (Ellis).

I-12

acid slurry from spent biomass. The subsequent processes of evaporation, crystallization, centrifugation,

and drying are similar to those used in the lime/sulfuric acid process.

The third refining method, ion exchange, is a recent development. In this method, the slurry is

passed through a bed of polymer-based resin. Ionic mineral elements such as calcium and magnesium

adhere to the resin, thus removing them from the citric acid slurry. The subsequent steps are similar to

the other two processes.58 *** use the ion exchange method. ***.59

All three refining methods produce citric acid that is dissolved in water. The temperature used

for the crystallization process determines whether the anhydrous or hydrous form is produced.60

Producers can either sell the citric acid or convert it into salts. Petitioners produce dihydrate

sodium citrate and anhydrous sodium citrate by diverting some of the citric acid slurry to a line dedicated

to citric salt production, where the slurry is reacted with sodium hydroxide or sodium carbonate.61

Similarly, potassium citrate is produced by reacting citric acid slurry with potassium hydroxide or

potassium carbonate.62

The dry forms of the subject merchandise are packaged in polyethylene-lined paper bags,

typically holding 50 pounds or 25 kilograms. “Super sacks” containing 500 to 2,000 pounds are also

used. When preferred in solution form, the subject product is shipped in drums, railcars, or tank trucks. 

Drums are usually 200 to 275 pounds.63 

Sodium citrate and potassium citrate can also be produced by some distributors that are known as

“converters.” Converters can provide either citric acid as purchased from the manufacturer, or have the

equipment on hand to blend sodium hydroxide or potassium hydroxide with citric acid, thus producing

sodium citrate or potassium citrate, respectively.64

INTERMEDIATE PRODUCT

Crude calcium citrate (“CCC”)65 is an intermediate product of producers that use the lime/sulfuric

acid refining method.66 During the preliminary phase of these investigations, petitioners asserted that

CCC has only one function - to be converted into citric acid.67 Respondents did not contradict this

assertion. Petitioners stated that there is not a separate CCC market in the United States or anywhere else
 68 Conference transcript, pp. 19 and 87 (Oakley).

 69 Conference transcript, p. 54 (Ellis).

 70 Conference transcript, p. 59 (Ellis).

 71 Petitioners’ postconference brief, p. 4.

 72 Ibid., exh. 1, p. 2.

 73 E.g., Chinese respondents’ postconference brief, p. 6; conference transcript, p. 137 (Porter, Waite).

 74 Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and 731-TA-1151-1152

(Preliminary), USITC Publication 4008, June 2008, pp. 11-12. In the Commission’s 2000 investigation, the scope of

which included only citric acid and sodium citrate, the Commission defined a single domestic like product that

included both, finding that “although specific end product formulations limit the actual interchangeability of citric

acid and sodium citrate, the record indicates that they are physically and chemically similar, are sold through the

same channels of distribution at similar prices and share the same manufacturing processes, as well as common

production facilities and employees . . . even though there are a few end uses unique to each of them, citric acid and

sodium citrate can be used for similar purposes in a wide variety of food, beverage and industrial products.” Citric

Acid and Sodium Citrate from China, Inv. No. 731-TA-863 (Preliminary), USITC Publication 3277, February 2000,

p. 7. The scope of these investigations includes citric acid, sodium citrate, and additionally, potassium citrate. 

 75 Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and 731-TA-1151-1152

(Preliminary), USITC Publication 4008, June 2008, p. 11. 

 76 Petitioners’ prehearing brief, p. 6.

I-13

around the globe, but they have been aware of instances when CCC was shipped from one country to

another for further processing.68 Although there are no known imports of CCC,69 petitioners said that

they included it in the scope of the subject product to avoid circumvention.70 The parties have not raised

issues with regard to CCC during the final phase of these investigations.

DOMESTIC LIKE PRODUCT ISSUES

During the preliminary phase of these investigations, the petitioners contended that the

Commission should find one domestic like product that is co-extensive with the scope of merchandise

subject to the investigations as identified by Commerce.71 They claim that potassium citrate, much like

sodium citrate, has many of the same end uses as citric acid, is derived from the citric molecule, produced

in the same production facilities, and sold in the same markets.72 During the preliminary phase,

respondents agreed with petitioners’ proposed definition of the domestic like product.73

The Commission preliminarily determined that the domestic like product should be defined in the

same manner as the scope defined by Commerce.74 Based on the preliminary record, the Commission

stated that “there is a continuum of domestically produced products corresponding to the scope of these

investigations, and no clear dividing lines based on chemical or physical form, grade, or product type. 

Whether in an intermediate form as unrefined calcium citrate, as citric acid, or transformed into sodium

citrate or potassium citrate, citric acid and its citrate salts come in a variety of chemical and physical

forms and grades for a variety of end uses, and physical appearance varies accordingly. All have similar

chemical composition.”75

In the final phase of these investigations, petitioners urge the Commission to continue to hold the

position they took in the preliminary phase, calling for a single domestic like product coextensive with the

scope as determined by Commerce.76 No respondent has raised an issue with regard to the domestic like

product in the final phase of these investigations. 

 1

 See Part IV for data on the relative sizes of these markets.

 2

 Petition, p. 7. 

 3

 Petition, p. 12, and conference transcript, p. 20 (Oakley).

 4

 Conference transcript, p. 54 (Staloch).

 5

 Petitioners’ posthearing brief exh. 1, p. 7. Staff notes that ***.

 6

 Conference transcript, pp. 8-9 (Ellis).

 7

 Hearing transcript, pp. 169-170 (Rainville).

 8

 *** also reported difficulty using Chinese product due to caking problems, and added that ***. See Part IV for

more details.

 9

 Conference transcript, pp. 110-114 (Hsu).

 10 Hearing transcript, pp. 215-216 (Rainville, Mendoza).

 11 *** U.S. producers submitted both producers’ and importers’ questionnaires in these investigations. Their

answers were the same for both questionnaires submitted by their firm, thus, in this chapter, their responses have

been counted only among producers.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET SEGMENTS

Citric acid and certain citrate salts have three primary end-use markets: foods and beverages

(especially carbonated beverages and health drinks), industrial (detergents and cleaners), and

pharmaceuticals.1

In the food and beverage segment, citric acid and certain citrate salts must meet the purity

standards of the U.S. Food and Drug Administration’s (“FDA”) Food Chemical Codex (“FCC”) for sale

in the U.S. market. Likewise, in the pharmaceutical segment, citric acid and certain citrate salts must

meet the standards of the U.S. Pharmacopoeia (“USP”).2

 Citric acid and certain citrate salts that meet

FCC and USP standards are called “food grade,” a standard higher than that required for the industrial

segment. However, U.S. producers typically manufacture citric acid and certain citrate salts to meet the

same FCC/USP standards regardless of end use, and they sell “food grade” product to the industrial

segment as well as to the food and drug segment.3

 JBL Canada, the Canadian producer, reports that all of

its product is food grade. Petitioners stated that there is no price premium for product sold into the food

and beverage segment.4

 ***. ***.5

Petitioners stated that subject imports from both Canada and China compete with the U.S. product

across all the market segments for citric acid and certain citrate salts.6

 JBL Canada asserts that its product

is mainly sold in the food and beverage segment of the market; it also sells to the pharmaceutical segment,

but sells relatively limited amounts to the industrial segment.7

 Although importer United Foods stated

that the Chinese product does not compete in the soft drink segment8

 ***. United Foods also reported

that the Chinese product is more available in the smaller food product segment, where the smaller

volumes make the market less interesting to U.S. producers accustomed to larger shipment volumes.9

JBL and the Chinese producers report that they do not know the ultimate market of much of the product

they sell through distributors.10

*** sell citric acid and/or certain citrate salts throughout the United States.11 Among other

importers, 15 of the 26 responding sold to a national market, two sold to six regions, two sold to two

regions, and seven sold to only one region. Sales to the Midwest and the Southeast regions were most

common, reported by five or six importers.
 12 Conference transcript, pp. 74-75 (Oakley).

II-2

CHANNELS OF DISTRIBUTION

Petitioners stated that all major domestic and foreign producers compete for critical large volume

accounts across the food, beverage, and detergent industries. The largest four end users that provided

purchaser questionnaires accounted for 38.6 percent of U.S. citric acid and certain citrate salts

consumption between 2006 and 2008, while the largest 12 end users accounted for 49.8 percent. 

Petitioners report that citric acid and certain citrate salts are not sold to end users or distributors based on

what end use is intended for the product, but rather on volume, with smaller-volume purchasers buying

from distributors and larger end users buying directly from producers and importers.12

Table II-1 presents information on channels of distribution for U.S. producers as well as for U.S.

importers of subject product from Canada, China, and product from nonsubject countries. U.S. product

and subject imports were consistently sold to end users more frequently than to distributors, although U.S.

producers ship a higher share of their product to end users than importers do. Nonetheless, some of the

largest distributors of domestic product are also importers of Chinese product; thus, an end user

purchasing from a single distributor/importer may be reported as purchasing from a distributor for

domestic product and directly from an importer for Chinese product.

Table II-1

Citric acid and certain citrate salts: U.S. producers’ and U.S. importers’ reported U.S. shipments of

subject product, by channels of distribution, 2006-2008

*******

The pricing data provided by the U.S. producers and the importers, detailed in Part V, also

provides information on the channels of distribution. Almost 95 percent of U.S. citric acid products for

which price data were reported was sold to end users. Subject imports were more likely to be sold to

distributors in spite of the fact that the largest importers also frequently act as distributors for domestic

product. Sales of citrate salts tend to be somewhat less concentrated in sales to end users, as shown in the

following tabulation. 

Product Type of purchaser U.S. Canada China

Citric acid

End users 94.9 *** 86.0

Distributors 5.0 *** 14.0

Citrate salts

End users *** -- 76.9

Distributors *** -- 23.1

Purchasers

Sixty-nine purchasers responded to the Commission’s purchasers’ questionnaire, of which 41

were end users and 28 were distributors. While there are many end users for citric acid and related citrate

salts, purchases tend to be relatively concentrated. The top purchasers in order of size are ***

***, each of which reported purchasing more than *** pounds of citric acid and related citrate salts over

the three years 2006-2008. *** pounds of citric acid and related citrate salts (including its imports). All

other purchasers each report purchasing less than *** pounds of citric acid and related citrate salts
 13 These purchases include some imports and there may be some double-counting if any of these purchasers

purchased from any of the listed distributors. 

 14 Purchasers who had purchased more than 20 million pounds of citric acid and salts in 2006, 2007, or 2008 were

also requested to provide additional price data; details of their purchases and negotiations are in app. D.

 15 ***.

 16 Petition, p. 10.

 17 Conference transcript, p. 35 (Poulos).

 18 ***.

 19 Petitioners’ prehearing brief, pp. 79-82.

II-3

products over the three years. Many purchasers reported more than one end use for their citric acid. 

Information on the top purchasers of citric acid is presented in table II-2. These 17 large purchasers

reported purchasing a total of *** billion pounds of citric acid between 2006 and 2008.13 All 17 firms

reported purchasing U.S. product (two purchased U.S. product only); 9 purchased Canadian product; 13

purchased Chinese product; and 10 purchased nonsubject product.14

Table II-2

Citric acid and certain citrate salts: Major reporting purchasers of citric acid and certain citrate

salts, 2006-2008, by industry, total amount purchased, and country sources

*******

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

Based on available information, U.S. citric acid and certain citrate salts producers have the ability

to respond to changes in demand with moderate-to-small changes in the quantity of shipments of U.S.-

produced citric acid and certain citrate salts to the U.S. market. Factors which constrain supply

responsiveness include no production of alternate products using the same equipment used to produce

citric acid and certain citrate salts, high capacity utilization, and overall capacity has not increased from

the 2006 levels.15 However, the existence of alternative markets and inventories may increase the supply

responsiveness.

Industry capacity

U.S. producers use deep tank fermentation to produce citric acid and certain citrate salts. This

method is reportedly more productive and has lower labor costs than the shallow pan process that may be 

used by some Chinese plants, but has higher energy costs.16 U.S. producers stated that because of the

high fixed costs in the industry, reducing production has “substantial” costs.17

Overall U.S. capacity is unchanged since 2006. Capacity utilization was relatively high and

increased steadily from 85.8 percent in 2006 to 91.7 percent in 2008. According to ***.18 Petitioners

assert that the domestic industry has not been able to make the “lumpy” types of capital investment

needed to build additional capacity because of the recent poor financial returns.19 
 20 Conference transcript, p. 77 (Anderson). Petitioners’ posthearing brief, exh. 2, p. 17.

 21 P&G’s prehearing brief, p. 32. Petitioners report that their export AUVs were higher than AUVs of domestic

shipments in 2008. Petitioners’ posthearing brief, exh. 3, p. 7.

 22 P&G’s prehearing brief, p. 33.

 23 Hearing transcript, p. 60 (Anderson).

 24 Hearing transcript, pp. 140-141 (Oakley and Poulous).

 25 Hearing transcript, pp. 51-52 (Satloch).

 26 PepsiCo’s prehearing brief, pp. 4, 8.

II-4

Among U.S. producers, *** stated that there had been no changes in the product range or

marketing of citric acid and certain citrate salts since January 1, 2005. ***, however, stated that

marketing had become more price-focused because of large volumes of available imported material.

Alternative markets

Between January 2006 and December 2008, U.S. producers exported between 20.7 percent of

production (in 2006) and 22.2 percent of production (in 2007). U.S. producers reported that they could

divert export shipments to the U.S. market if circumstances warrant and plan to shift almost *** of their

2008 exports to the U.S. market.20

Respondent P&G does not believe there is much ability for U.S. producers to increase production

or willingness on their part to shift product to the U.S. market. It cited as evidence of unwillingness to

shift product to the U.S. market the inability of the U.S. producers to provide all the product purchasers

requested while the producers continued to export despite the AUVs for exports being lower than those

for U.S. shipments throughout the period for which data were collected in this investigation.21 P&G also

asserts that by 2008 the U.S. producers were “effectively operating at 100 percent of capacity.”22

Inventory levels

U.S. producers’ inventories fell steadily from 16.6 percent of shipments in 2006 to 8.7 percent in

2008. However, at this level, U.S. producers have some ability to use inventories as a means to increase

supply.

Production alternatives

U.S. producers reported that they did not produce any other products on the equipment used to

produce citric acid and certain citrate salts. However, the main input in citric acid production, corn, is

used in the production of other products, including ethanol; ***.

Supply availability

Petitioners report that the claims of shortages are overwhelmingly related to 2008 and are

indicative of the petition’s effects.23 ADM and Tate & Lyle reported that they met all their contractual

obligations in 2008.24 Cargill reported that for the year 2008, it was able to meet its contractual

agreements with all but one major customer, in spite of a plant disruption that caused the loss of about one

week of production.25

Respondent PepsiCo reports that the “domestic producers are unable (and apparently unwilling)

to satisfy United States demand for citric acid,” ***.26 ***. P&G reported that in 2008, its shipments

from one producer declined by 30 percent at the producer’s request, one U.S. producer supplied under
 27 Hearing transcript, pp. 183-184 (Smith). Petitioners report that ***. Petitioners’ posthearing brief, ex 3, p. 25.

 28 Hearing transcript, p. 220 (Smith).

 29 Hearing transcript, pp. 193-195 (Hofmann).

 30 Hearing transcript, pp. 199-201 (Pensak).

 31 Hearing transcript, pp. 205-206 (Bloom).

 32 P&G’s posthearing brief, p. 11.

 33 ***. ***.

II-5

half of its agreed volume, and the third producer had no material available to meet any of the shortfalls of

the other U.S. producers.27 As a result, it reported, only one of the U.S. producers met its contractual

requirement, and the other two did not meet contractual requirements both in terms of timing and

volume.28 Reckitt Benckiser reported that in 2007 it began to purchase from JBL Canada “only after U.S.

producers refused to offer sufficient quantities to us.” It reported that it was unable to contract for all the

product it wanted from U.S. producers in 2009. U.S. producers, it reported, have little interest in meeting

the needs of small to mid-sized purchasers, preferring “to focus on large food and beverage purchasers.”29

Vertellus reported that in 2008, Tate & Lyle’s delivery lead times grew from 1 week to 10 weeks; this

forced it to purchase Chinese product on the spot market to maintain supply. According to Vertellus, Tate

& Lyle refused to contract to supply it in 2009, in spite of a “20-year relationship with Tate & Lyle,” and

the other U.S. producers also refused to supply it in 2009. Vertellus reported that U.S. producers refused

to supply it in spite of having capacity to produce what Vertellus needed since the U.S. producers report

that they are not producing at full capacity.30 FBC reported that although Tate & Lyle had supplied it in

2008, all three U.S. producers refused to contract to supply it in 2009.31 P&G also reported that world

demand is at *** percent of world supply, indicating that the citric acid market is tight worldwide.32 

Purchasers were asked a number of questions about the availability of citric acid and certain

citrate salts. Forty-eight of 65 responding purchasers (including ***) reported that the spike in corn

prices had not affected the availability of citric acid and certain citrate salts. Twenty-nine of 69

responding purchasers reported that they had been put on allocation or had limits put on the amount of

citric acid and certain citrate salts that they could purchase since January 2006. All three U.S. producers,

JBL, and some importers of Chinese product were reported to have limited supply. ***.33 According to

purchasers, reasons for limits on supply included: ***; U.S. manufacturers and their distributors refusing

to quote from the end of 2008 to the time questionnaires were filled out; Tate & Lyle, JBL, ADM, and

Cargill were sold out from January 2007 to 2008, forcing purchasers to use spot purchases; ***; Canadian

product was redirected to the U.S. beverage market in 2007, causing the purchaser to use more Chinese

product; and reduced supply of Chinese product due to the Olympics.

Twenty-four of 69 responding purchasers reported that some suppliers were unable to supply

some or all of their requirements. Sources from which purchasers were not able to obtain sufficient

supply included U.S. producers, JBL, importers of Chinese product, and importers of product from Israel. 

*** reported that individual U.S. producers had been unable to meet their requirements.

Subject Imports

Canada

Based on available information, JBL Canada, the Canadian producer, has the ability to respond to

changes in demand with moderate changes in the quantity of shipments of citric acid and certain citrate

salts to the U.S. market. It has *** inventories, *** exports but a *** share of exports going to countries

other than the United States, and *** capacity utilization. JBL Canada increased its capacity from 2006
 34 *** to produce citric acid and certain citrate salts. *** an ion-exchange method of refining (rather than the

solvent extraction ***). Petition, pp. 10-11.

 35 U.S. Census data on the landed duty paid value of U.S. imports for consumption show that, over the last ten

years, U.S. imports of Austrian product fell from a high of $22.6 million in 2001 to $2.8 million in 2003, and rose

slowly to $4.3 million in 2008. U.S. imports of Canadian product rose from $0.1 million in 2001 to $26.6 million in

2003 and then $68.9 million in 2008.

 36 Conference transcript, pp. 117-119 (Waite).

 37 Official Journal of the European Union, December 3, 2008.

II-6

to 2008, and reported that it had not observed any changes in the *** of citric acid and certain citrate

salts.

Industry capacity

JBL Canada is the only known Canadian producer of citric acid.34 Its capacity increased from

*** pounds in 2006 to *** pounds in 2008. JBL Canada projects that its capacity ***. Capacity

utilization increased from *** percent in 2006 to *** percent in 2008.

JBL Canada produces only citric acid, not certain citrate salts, in its Canadian plant. It reported

that it chose its Canadian location because of the proximity to customers, its main raw material supplier

(Corn Products International), and its water supply. It also said that it has replaced supplying the U.S.

market citric acid from its Austrian plant with production from its Canadian plant.35 It added that all of its

Canadian citric acid is food grade.36

Alternative markets

JBL Canada’s exports to markets other than the United States accounted for *** percent of its

total shipments in 2006, *** percent in 2007, and *** percent in 2008. Sales to the Canadian home

market were ***, falling from *** percent in 2006 to *** percent of shipments in 2008.

Inventory levels

JBL Canada’s inventories were ***, accounting for *** in 2008.

China

Based on available information, Chinese producers have the ability to respond to changes in

demand with moderate-to-large changes in the quantity of shipments of citric acid and certain citrate salts

to the U.S. market. The main contributing factors to the high degree of responsiveness of supply are the

increase in capacity, the existence of alternate markets, and the availability of inventories. The December

2008 decision by the EU to address Chinese dumping via the imposition of antidumping duties and/or the

acceptance of price undertakings on product from China may also contribute to some degree to Chinese

responsiveness.37

Industry capacity

Petitioners stated their belief that large Chinese producers use the deep tank fermentation

production process (also used by U.S. producers ***), but that some smaller and older Chinese producers
 38 Petition, p. 10.

 39 Conference transcript, p. 25 (Oakley).

 40 Conference transcript, p. 43 (Anderson).

 41 Petition, pp. 33-34.

 42 Hearing transcript, pp. 163-164 (Shao).

 43 Chinese respondents’ prehearing brief, p. 72. The petitioners report that ***. Petitioners’ posthearing brief,

exh. 1, p. 38. 

 44 Chinese respondents’ prehearing brief, p. 73.

 45 Chinese respondents’ prehearing brief, p. 80.

 46 Chinese respondents’ prehearing brief, p. 80.

 47 Hearing transcript, p. 166 (Shao).

 48 Petitioners’ posthearing brief, exh. 4, pp. 1-5.

II-7

may still use the shallow pan production process.38 Petitioners described the equipment used by the five

largest Chinese producers as “world class.”39 Petitioners also stated that most Chinese product is

anhydrous now (unlike during the previous investigation in 2000).40 Petitioners also described Chinese

capacity as having undergone massive expansion (that they claim was subsidized by the Chinese

government) in order to increase exports, as the Chinese market for citric acid is much smaller than

Chinese capacity to produce citric acid.41

Chinese producers representing the vast majority of Chinese production responded to the

Commission’s foreign producer questionnaires. Reported overall capacity increased from 1.4 billion

pounds in 2006 to 2.0 billion pounds in 2008. 

Chinese respondents report that the Chinese citric acid industry has been consolidating since

2002, and by 2008, 15 Chinese producers were approved for exports.42 Chinese respondents report that

Chinese producer ***.43 In addition, they report that DSM, a Chinese producer with a reported capacity

of 110 million pounds, has discontinued production in China, has closed its factory, and does not plan to

rebuild capacity in China.44

Alternative markets

Exports of Chinese citric acid and certain citrate salts to the United States accounted for 11.2

percent of China’s reported shipments in 2006, 9.4 percent in 2007, and 10.0 percent in 2008. Shipments

of Chinese citric acid and certain citrate salts to the Chinese home market (including internal

consumption) were 26.2 percent of total shipments in 2006, 28.6 percent in 2007, and 28.9 percent in

2008. Most shipments between 2006 and 2008 were to non-U.S., non-Chinese markets; shipments to

these alternative markets accounted for between 61.2 and 62.6 percent of total Chinese shipments. 

Exports of citric acid to the EU are subject to a December 2008 price undertaking. The Chinese

respondents report that the EU expected imports from China to “remain at a substantial level, appearing

sufficient to guarantee the security of supply in the EU.”45 With this price undertaking in place, they

contend that “the Chinese producers can maintain their traditional reliance on the EU as their primary

export market.”46 In addition, demand within China is expected to grow.47 The petitioners contend that

demand is at best stable and likely to decline; they noted that predictions of growth were made before the

global recession began and are no longer relevant.48
 49 Conference transcript, pp. 73-74 (Ellis and Anderson).

 50 P&G reported that it has contemplated replacing phosphates with citric acid in dishwasher detergent but lack of

availability of domestic supply may force it to look to other formulations or technologies. Hearing transcript, pp.

185-186 (Smith). ***.

 51 Petition, p. 8.

 52 Petition, p. 8.

 53 *** and staff calculations.

 54 Conference transcript, pp. 118-119 (Waite).

II-8

Inventory levels

Inventories of Chinese citric acid and certain citrate salts accounted for 6.2 percent of their total

shipments in 2006 and 2007, but then more than doubled to 13.1 percent in 2008.

Nonsubject Imports

Citric acid and certain citrate salts have been imported into the United States from Israel,

Colombia, Germany, Thailand, Austria, and Belgium, listed in descending order of 2008 volume. 

Petitioners described Belgium as producing substantially less than Canada and China, and all other

nonsubject countries produce less than Belgium.49

U.S. Demand

Based on the available information, it is likely that changes in the price level of citric acid and

certain citrate salts will result in a small change in the quantity of citric acid and certain citrate salts

demanded. The main contributing factor to the small degree of responsiveness of demand is the low cost

share of citric acid and certain citrate salts in most of their end uses. Contributing to some extent is (1) 

increases in price and supply uncertainty are likely to inhibit demand growth as firms formulate new

products so that they do not include citric acid and certain citrate salts and (2) experimental uses such as

green cement become less competitive.50 

End Uses

In the food and beverage industry, citric acid is used as an acidulate, a preservative, and a flavor

enhancer, especially in beverages (including carbonated, non-carbonated, dry powdered, and wine), jams,

desserts, frozen foods, and canned fruits and vegetables. Citric acid is also used in pharmaceuticals and

cosmetics, as well as in household laundry detergents, metal finishers, cleaners, textile treatments, and

other industrial applications.51

Sodium citrate is used in the same products (and for the same reasons) as citric acid, but has

additional uses in cheese and other dairy products, household cleaner products, and pharmaceuticals.

Potassium citrate is used in pharmaceutical products as an antacid, a diuretic, and an expectorant. It is

also used in “electro polishing” and as a buffering agent, and can be used in place of sodium citrate in

food and beverage products when it is important to reduce the sodium content.52

***, U.S. consumption of citric acid in 2005 was ***.53 JBL Canada estimated that, on a global

basis, demand for citric acid was 40 percent for beverage end uses, 20 percent for food end uses, 25

percent for detergent end uses, and the remainder for pharmaceuticals.54
 55 P&G’s posthearing brief, p. 11 and exh. 6.

 56 Conference transcript, p. 122 (Waite).

 57 ***.

 58 Petition, p. 8.

 59 Conference transcript, p. 61 (Staloch), and petitioners’ postconference brief, exh.1, p. 29.

 60 Chinese respondents’ prehearing brief, pp. 7-8.

 61 Hearing transcript, p. 211 (Smith).

II-9

Demand Characteristics

*** reported that U.S. consumption of citric acid and salts was *** metric tons (*** pounds) in

2005 and that world consumption of citric acid and salts was *** metric tons (*** pounds). *** projected

that U.S. consumption of citric acid and salts will rise to *** metric tons (*** pounds) in 2010. ***

estimates place the United States market as smaller than that of *** but larger than that of ***. P&G

reports that in 2008 demand was expected to increase by ***.55

Demand from beverage manufacturers is highest from April to August of each year.56 However, a

large portion of contracting is performed near the end of each year (see Part V for details on length of

contracts and timing of these agreements). 

Fifty-three of the 68 responding purchasers reported that the quantity of their purchases varies

over the year. Seasonality was reported to account for this variation by 25 of these purchasers; other

factors noted include sourcing customer requirements, product demand, price, and availability. ***.

Demand Trends

Increasing U.S. demand since 2006 was reported by all three producers and by 21 of 26

responding importers. Four importers reported that demand was unchanged and one reported that demand

had fallen with the economic downturn. Reasons for increased demand included economic growth; citric

acid is a relatively inexpensive product; downstream products were reformulated to increase use of citric

acid; increased use in detergents; sodium reduction initiatives; and new products. 

Purchasers who were end users were asked if demand for their end products which incorporate

citric acid and related citrate salts had changed since January 2006. Twenty of the 41 responding

purchasers reported increased demand for their products; 16 of the 20 reported that this had increased

their demand for citric acid and related citrate salts while 4 stated that it had not. Five firms reported that

demand for end product had decreased; four of these firms reported that this had affected the demand for

citric acid and related citrate salts. Nine purchasers reported that demand had fluctuated, with six

reporting that it had affected demand for citric acid and related citrate salts. Seven purchasers reported

that the demand for their end products was unchanged.

Petitioners ***57 reported that the use of citric acid in laundry detergents has increased as citric

acid has replaced phosphate-based formulations and because of the growth in sales of ultra-concentrated

liquid detergents, which contain more citric acid than powdered detergents.58 Petitioners also described

demand for potassium citrate as increasing due to the increased demand for low-sodium food and

beverages, but later characterized detergent manufacturers as not having yet switched their formulas to

incorporate citric acid.59 Chinese respondents reported that demand for citric acid remains strong in spite

of the economic downturn.60 Respondents predicted the increased use of citric acid because dishwashing

detergent will be required to no longer use phosphates after July 1, 2001;61 plasticizers will attempt to
 62 Hearing transcript, p. 198 (Pensak).

 63 Chinese respondents’ prehearing brief, pp. 8-10. ***. 

 64 ***.

 65 Petitioners’ posthearing brief, exh. 4, pp. 2-3.

 66 Hearing transcript, pp. 37-38 (Poulos).

 67 Petitioners’ posthearing brief, exh. 4, pp. 3-4.

 68 Hearing transcript, p. 74 (Anderson).

 69 Petitioners’ posthearing brief, exh. 4, p. 5.

 70 Petitioners’ posthearing brief, exh. 8.

 71 Petitioners’ prehearing brief, exh. 16. “DSM announces closure of its citric acid manufacturing plant in Wuxi

(China).”

 72 Hearing transcript, p. 171 (Button).

 73 Hearing transcript, p. 191 (Taylor).

 74 Hearing transcript, p. 185 (Smith).

 75 Hearing transcript, p. 187 (Smith).

 76 Hearing transcript, p. 194 (Hofmann).

II-10

replace phthalate plasticizers;62 and there is potential for replacing Portland cement with green cement, all

potentially increasing use of citric acid and related citrate salts.63

*** reported that the main driver for citric acid demand growth is ***.64

Future demand

Petitioners predict that demand will fall with the current economic downturn. They stated that the

decline was not felt in 2008 because the recession only began to have an impact late in 2008.65

Petitioners also predicted that, for developing markets, citric acid demand will stagnate or decline;

although economic development in the developing markets would lead to increased per-capita

consumption, developing countries have been worse hit by the economic downturn. According to the

Petitioners, China’s consumption has already fallen and its inventories have increased, so petitioners

expect product to flood the U.S. market if duties are not imposed.66 In addition, Petitioners reported that

demand for products using citric acid is also declining in the EU.67 They report that in spite of P&G’s

statements that it does not expect its demand for citric acid to decline, P&G reported substantial drops in

volume; in addition, falling sales in other countries will increase the Chinese product available for sale to

the United States.68 New uses are speculative.69 ***.70 Moreover, structural overcapacity is expected to

remain in the world market.71

On the whole, respondents expected demand for citric acid to not decline significantly during the

current recession.72 PepsiCo reported anticipating “flatter, slightly declining volume for its beverage

products in the current economic environment,” but expects demand to rise in the longer run.73 P&G

reported that its sales fell 4 percent in its fabric and household care business during October to December

2008, but that “this reduction was primarily caused by P&G’s customers reducing their inventories” and

these inventory reductions are expected to be temporary, as orders are already increasing.74 P&G reported

that it estimated “global demand to be between 92 and 95 percent of global producers’ effective capacity

to produce citric acid,” and as a result is talking with producers to increase the supply dedicated to P&G’s

use.75 Reckitt Benckiser reported estimating “global operating capacity rate at above 90 percent and

market growth at 6 to 8 percent annually even in today’s adverse economy.”76 Reckitt Benckiser reported

that it will be eliminating phosphates from dishwashing detergents after July 1, 2010, requiring a new

formulation that increases use of trisodium citrate, thus increasing its volume of purchases “roughly
 77 Hearing transcript, pp. 196-197 (Hofmann).

 78 Hearing transcript, p. 210 (Hofmann).

 79 Hearing transcript, pp. 197-198, 213 (Pensak).

 80 Petitioners do not expect demand to increase significantly in large scale applications including green cement,

dishwashing detergents, while the increased demand for oil sands will be depressed with the price of crude. 

Petitioners’ posthearing brief, exh. 9, pp. 2-3.

 81 Respondent P&G’s posthearing brief, p. 11.

 82 Hearing transcript, pp. 175-176 (Smith).

 83 Hearing transcript, pp. 188-190 (Taylor).

 84 Hearing transcript, pp. 193-194 (Hofmann).

 85 Petitioners’ prehearing brief, pp. 23-24, 28-29.

II-11

fourfold.”77 It also reported that the EU is considering banning phosphates in dishwashing detergents, and

that such a change in Europe would increase global demand by 10 percent.78 Vertellus reported that it

expects demand to increase despite the recession because of health and safety restrictions on the use of

some phthalates which could be replaced by citrate esters.79 80 Respondents characterize global supply as

tight with world demand *** percent of world supply.81

Changing Purchase Patterns

Twenty-three of the 69 responding purchasers reported that they had changed purchasing patterns

of citric acid and certain citrate salts in the last 3 years. Most of these reported that increased sales had

resulted in increased purchases, but three reported that shortages or lack of domestic supply had caused

purchasing patterns to change, increasing imports. Thirty-seven of 68 responding purchasers reported

changing suppliers; a number of these shifted purchases among importers. ***.

Variation in Sources Used Within a Year

Forty-three of the 68 responding purchasers reported that the source of their product varies within

a year. Factors affecting sourcing were customer requirements, product specifications, product demand,

price, availability, and required volume above that contracted. ***. 

Reasons Purchasers Use of Multiple Sources

P&G reported that it diversifies its sources of supply among producers both inside and outside the

United States in order to ensure reliability of supply and minimize the risk of plant disruptions.82

Similarly, PepsiCo reported diversifying its supply to ensure that quality product is available to maintain

and increase production.83 In contrast, Reckitt Benckiser reported that it prefers to use only material from

U.S. sources for security and planning reasons, but that in 2007 it purchased from JBL because U.S.

producers refused to offer it sufficient quantities.84 Petitioners report that there were no problems with

availability during 2006 and 2007, and any such problems in 2008 were caused by the filing of the

petition.85
 86 Hearing transcript, pp. 185-186 (Smith).

 87 The Soap and Detergent Association, letter to the Commission, March 25, 2009. 

II-12

Substitute Products

*** responding U.S. producers, 9 of the 28 responding importers, but only 10 of the 63

responding purchasers, reported substitutes for citric acid and certain citrate salts. Substitutes listed

include acetic acid, azocarbonamide, EDTA (ethylenediaminetetraacetic acid), fumaric acid, HCA

(hydroxycitric acid), lactic acid, malic acid, phosphoric acid, potassium chloride, potassium phosphate,

sodium bicarbonate, sulfuric acid, and tartaric acid. *** reported no substitutes for citric acid. P&G

reported that in replacing phosphates in dishwasher detergent it is considering both citric acid and “other

formulations or technologies,” reflecting that these are potential substitutes for citric acid, at least at the

time of formulation of new products.86 The Soap and Detergent Association reports that antidumping

duties would force its members to reformulate their products where possible to reduce the use of citric

acid, indicating that some substitutes (even if less effective) exist.87 

Substitution depends on the customer’s applications. For example, HCA can be used a substitute

to lower the pH of a solution, while lactic acid, acetic acid, fumaric acid, malic acid, phosphoric acid, and

tartaric acid can be used as substitutes in food and beverage additives, and sulfuric acid can be used as an

industrial acidulate.

*** U.S. producers, nine of the 10 responding importers, and all 10 of the responding purchasers

reported that the prices of these substitutes did not affect the price of citric acid and certain citrate salts. 

The other importer responded that the prices of substitutes did affect the price of citric acid.

Cost Share

Thirty-six purchasers reported the cost share of citric acid and certain citrate salts in one or more

end products, with a total of 75 end-product responses. There were 47 instances where purchasers

reported that cost shares were less than 6 percent; 15 instances in which cost shares ranged from 6 percent

to less than 25 percent, 5 instances in which cost shares ranged from 25 to less than 50 percent; and 8

instances in which cost shares were 50 percent and above. ***.

Eight importers estimated that citric acid and certain citrate salts’ share of the cost of downstream

products ranged from 1 to 50 percent for ***, with 11 of the 16 products having cost shares under 6

percent. U.S. producers estimated that citric acid and certain citrate salts’ share of the cost of downstream

products was relatively low, ranging from under 1 percent to ***.

SUBSTITUTABILITY ISSUES

Purchasers were asked how frequently they purchased citric acid and certain citrate salts at the

lowest price. Four reported that they always purchase the lowest-priced product, 27 reported that they

usually purchased the lowest-priced product, 34 sometimes purchased the lowest-priced product, and 4

never purchase the lowest-priced product. ***.

Lead Times

Among U.S. producers, *** stated that *** percent of sales were from inventory with a lead time

of ***, while *** sold *** and *** percent respectively from inventory with a lead time of *** days. 
 88 Petitioners report that lead times normally vary over the year, increasing during periods of high demand. 

Petitioners’ posthearing brief, exh. 4, pp. 23-24.

 89 One additional purchaser did not explain why it would purchase less. 

 90 One firm reported that if Canadian product were not available it would purchase more Chinese product. Two

firms did not explain their answers.

II-13

The remainder was produced to order with lead times of ***.88 For imports from Canada, JBL reported

selling *** of its product from inventory with a *** lead time. 

Thirteen importers reported selling Chinese product from inventory; nine of these sold 90 to 100

percent from inventory and the remaining four sold 30 to 50 percent from inventory. Twelve importers

reported selling Chinese product on a produced-to-order basis, five of which sold all their citric acid and

certain citrate salts produced to order. Lead times for produced-to-order products ranged from 4 to 63

days, with eleven of these firms reporting lead times of 40 days or more.

Response if Subject Imports were No Longer Available

Purchasers were asked if they had purchased product from the subject countries since January

2006, and those who had were asked what they would do if this product were not available. Responses

are in the following tabulation. 

 

Source

Purchased

product from

this source

since 2006

If product from this country were not available, firm would

purchase--

Less product

overall

More U.S.

product

More nonsubjectcountry product

Yes No Yes No Yes No

Canada 27 3 24 18 8 20 6

China 52 12 32 35 12 35 9

Two firms which reported that they would reduce their purchases if the Canadian product were not

available stated that some of their customers’ specifications allowed only JBL Canada’s product and that

if JBL Canada reduced the amount of product available, these purchasers would buy less.89 Three of the

firms reporting that they would not purchase more U.S. material if less Canadian product were available

reported that there are limited supplies of U.S. material.90 *** reported that U.S. producers had limited

their supply, forcing it to look overseas. Two firms reported that they would not reduce their purchases,

would increase their purchases of U.S. product, and not purchase overseas. One of these firms, ***,

reported that customer demand dictates need, and that domestic supply was likely to be available.

Of the 12 purchasers of Chinese product that reported that if Chinese product were not available

they would purchase less product overall, seven gave explanations. *** reported that it relies heavily on

Chinese producers because domestic supply lines have collapsed. *** stated that if Chinese material were

not available, it would have to use other sources or exit the market completely because it did not have the

same variety of U.S. and non-Chinese import options; if its purchases of Chinese material fell it would

reduce purchases due to lack of supply. *** reported that it was not approved to buy from U.S.

producers. *** firm reported that it would buy as long as it could sell to the market based on cost. ***

reported that it would try to replace Chinese volume with product from another country. *** reported

that U.S. producers will not sell to small distributors. *** reported that U.S. product is far too costly to

use on a regular basis. Other firms that explained why they would not purchase more U.S. product if
 91 Purchasers were asked to report other factors beyond the top three that they considered in deciding from whom

to purchase. One purchaser reported that U.S. producers would not sell to it because it was too small, one reported

that consolidating purchases with those of other ingredients was a factor, and one reported that its purchases are

influenced by ***.

II-14

Chinese supply were limited mainly reported problems with U.S. supply. *** reported that U.S.

producers have limited how much it could buy, forcing it to look overseas. *** reported that the U.S.

producers do not make enough product for U.S. needs, therefore it needs to source elsewhere. ***. ***.

Factors Affecting Purchasing Decisions

Purchasers, importers, and producers were asked if the various forms of citric acid (anhydrous,

monohydrate, dihydrate, and solution) were always, frequently, sometimes, or never interchangeable

(table II-3).

Table II-3

Citric acid: Perceived interchangeability between forms, as reported by producers, importers, and

purchasers

Types of citric acid

 Number of U.S. 

producers reporting

Number of U.S.

importers

reporting

Number of U.S.

purchasers

reporting

A F S N A F S N A FS N

Anhydrous and monohydrate *** *** 0 0 2 4 8 5 2 3 9 19

Anhydrous and dihydrate1 0 0 0 0 1 1 5 5 1 3 4 17

Anhydrous and solution *** *** 0 0 3 2 9 3 4 2 11 18

Monohydrate and dihydrate1 0 0 0 0 2 1 3 6 1 3 3 17

Monohydrate and solution *** *** 0 0 4 3 5 5 2 3 5 14

Dihydrate and solution1 0 0 0 0 2 1 5 4 1 3 3 15

 1

 All U.S. producers reported that citric acid did not occur in dihydrate form. 

Note.--A = Always, F = Frequently, S = Sometimes, N = Never. Answers from firms that are both producers and

importers are included only with producers. Answers from firms that are both importers and purchasers are

included with purchasers if they do not sell citric acid in the form in which they purchase it, otherwise they are

included with importers.

Source: Compiled from data submitted in response to Commission questionnaires.

Major Factors in Purchasing

Purchasers were asked to identify the three major factors considered by their firm in deciding

from whom to purchase citric acid and certain citrate salts (table II-4). Quality was reported by the

largest number of purchasers as the most important factor. Availability was reported by the largest

number of firms as the second most important factor. Price was reported by the largest number of firms

as the third most important factor, but was also the factor most reported as being in the top three factors.

Other factors reported by more than one purchaser were approved supplier/traditional supplier/contract,

consistency, reliability of supply or supplier, product meets specifications, delivery terms,

service/technical support, and packaging.91
II-15

Table II-4

Citric acid and certain citrate salts: Most important factors in selecting a supplier, as reported by

purchasers

Factor

Number

one factor1 Number

two factor

Number

three factor

Quality/(quality meets or exceeds standards) 33 8 11

Price 13 20 29

Approved supplier/traditional supplier/contract 10 3 3

Availability 8 25 8

Consistency 1 2 0

Product meets specifications 1 1 2

Service/technical support 0 3 3

Reliability of supply or supplier 0 2 5

Delivery terms 0 1 2

Packaging 0 0 2

Other2 212

 1 One firm reported both quality and consistency as most important factor, one firm reported both quality and

service, and one reported both service and delivery terms as the second most important factor; all these responses

are recorded.

 2 “Other” includes performance and lead time as the first factor; distributorship as the second factor; and

genetically modified organisms (“GMO”) and country as third factors.

Source: Compiled from data submitted in response to Commission questionnaires.

Factors Determining Quality

Purchasers were asked to identify the factors that determine the quality of citric acid and certain

citrate salts. Purchasers reported specific factors including: meeting specifications such as FCC, USP,

and kosher, and the paperwork to go with these standards or certificates of analysis; granulation

characteristics such as free flowing, not caking, and granulation size; having product assayed for purity

(lack of contamination with arsenic, oxalic acid, sulfates, mercury, calcium, iron, or chloride, or no

residuals); physical characteristics such as appearance (color), flavor, and aroma; and other factors such

as anhydrous; packaging; shelf life; solubility; supplier support; percent active; genetically modified

organism (“GMO”); and product consistency. 

Qualification

Purchasers were asked if they require their suppliers to be FCC and USP qualified and if so, for

what share of their purchases this is required. Forty-eight of 69 responding purchasers reported that they

required FCC and USP qualification for all of their purchases; 5 purchasers reported requiring FCC and

USP qualification for 3 to 90 percent of their purchases; and 16 did not require FCC and USP

qualification. ***.

Purchasers were asked if they required other qualifications from their suppliers and for which

share of their purchases they were required. Thirty-three of 68 responding purchasers reported that they 
 92 ***.

 93 This firm, ***, also rejected product from some Chinese producers.

II-16

required other qualification for all of their purchases and one reported additional qualifications for 10

percent of its purchases.92 Other factors considered in the qualification of a supplier included kosher

certification, lab reviews, certificates of analysis, testing of samples, product meets customers’

specifications, qualified by customers, trial manufacturing, certificate of analysis, MSDS (material safety

data sheet), nutritional information, allergen informant, and GMO.

Sixty-seven of the 69 responding purchasers reported some qualification of new suppliers,

although one of these only required “price” for qualification. Time required for qualification was

reported by 67 purchasers as ranging from 1 to 365 days, with 28 purchasers reporting times of less than

30 days, 26 reporting 30 to 60 days, and 13 over 60 days. ***.

Seven purchasers, ***, reported that one or more domestic or foreign producers failed in their

attempts to certify or qualify their citric acid and certain citrate salts or had lost their approved status since

2006. One reported that a U.S. producer had been disqualified because of granulation;93 three of these

purchasers reported that Chinese firms had been disqualified for particle size, granulation, off-color

product, inconsistent quality, and failing a quality audit; and four reported that product from Thailand had

been disqualified, all for caking.

Caking

Purchasers and importers were asked to report on the importance of caking, its impact on firms,

and sources that supplied material which was caked. Twenty of 64 responding purchasers and 6 of 27

importers reported that caking was very important, 12 purchasers and 7 importers reported that it was

somewhat important, and 32 purchasers and 14 importers reported it was either not important or not a

problem. Reasons given for why caking was a problem included that customers would not accept caked

material, caked material does not flow properly, caked material has caused equipment to break, caking

affects the weight of product and requires that formulas be reworked, caked product cannot be used in

blending material, cannot be used in dry blends, and caked material takes longer to melt. Some firms

reported that caking was not a problem because citric acid needed to be converted into liquid citric acid

before use or because these firms converted caked material into liquid form. ***. 

Importers and purchasers were asked to report the frequency of caking of citric acid and certain

citrate salts from different country sources. Responses are presented in the following tabulation.

 Source

Importers Purchasers

Frequently Sometimes Rarely Never Frequently Sometimes Rarely Never

U.S. 0 0 6 11 1 5 13 35

Canada 0 0 5 10 0 5 10 34

China 1 5 10 8 4 12 20 24

Nonsubject

countries 1 0 6 11 2 8 4 29

Both purchasers and importers agreed that caking in the U.S. and Canadian products tended to be similar

and relatively uncommon; in contrast, product from China had more importers and purchasers reporting

that there were at least sometimes problems with caking.
II-17

Twenty-four purchasers and 13 importers reported that they had purchased caked material. 

Fourteen purchasers and 10 importers had taken measures to address caking. Six purchasers and seven

importers reported that the cost of these measures was less than 1 percent of the cost of the citric acid,

three purchasers reported that costs were 1 to 2 percent, four purchasers and two importers reported 2 to 5

percent, and three purchasers reported that these steps would cost 5 percent or more of the costs of citric

acid and certain citrate salts.

Six purchasers and seven importers reported purchasing equipment or implementing a practice to

reduce caking or clumping. ***. Other responses included not buying more material from sources

providing caked material, returning caked material, not buying product manufactured from July through

September, “solutionizing” equipment, and the special handling of caked material.

Importance of 24 Specified Purchase Factors

Purchasers were asked to rate the importance of 24 factors in their purchasing decisions (table II5). Factors that were reported as “very important” by half or more of the responding firms were

availability and availability as citric acid (64 firms), product consistency (62 firms), reliability of supply

(61 firms), price (57 firms), availability as anhydrous form (54 firms), quality meets FCC/USP standards

(52 firms), delivery time (42 firms), size of granulation (41 firms), and delivery terms and availability as

sodium citrate (34 firms).

Purchases from Specific Producers and Countries

Purchasers were asked how frequently they and their customers were aware that the citric acid

and certain citrate salts they purchased were produced in the United States or imported, and how

frequently they knew the manufacturer. The following tabulation summarizes the responses.

Purchaser/customer decision Always Usually Sometimes Never

Purchaser aware of country of origin . . . . . . . . . . . . . . . . . . . . . . . . . 54 11 1 0

Purchaser aware of manufacturer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 16 5 0

Purchaser’s customer aware of country of origin . . . . . . . . . . . . . . . . 26 14 17 10

Blending Product from Different Countries

Most purchasers report that they did not blend citric acid and certain citrate salts from different

countries, with 50 of 69 responding purchasers reporting that they never blended material from different

sources. ***. Of the 26 responding distributors, only three reported blending material from different

countries. ***. Blending of material from different sources by distributors was limited because of the

importance of tracing material used in food.
II-18

Table II-5

Citric acid and certain citrate salts: Importance of purchase factors, as reported by purchasers

Factor

Very important Somewhat important Not important

Number of firms responding

Availability 64 2 2

Availability in anhydrous form 54 9 4

Availability as citric acid 64 2 2

Availability as potassium citrate 23 7 36

Availability as sodium citrate 34 11 22

Availability in dihydrate form 13 6 46

Availability in monohydrate form 5 10 51

Availability in solution/liquid form 12 10 44

Delivery terms 34 28 5

Delivery time 42 22 3

Discounts offered 19 24 23

Extension of credit 20 23 23

Genetically modified inputs 13 22 31

Minimum quantity requirements 12 27 28

Packaging 23 37 8

Price 57 11 0

Product consistency 62 4 2

Product range 9 35 20

Quality meets FCC/USP standards 52 6 10

Quality exceeds FCC/USP standards 20 19 27

Reliability of supply 61 4 3

Size of granulation 41 21 6

Technical support 15 37 15

U.S. transportation costs 26 33 8

Note.--Not all companies gave responses for all factors. 

Source: Compiled from data submitted in response to Commission questionnaires.

Comparisons of Domestic Products and Subject Imports

Producers, importers, and purchasers were requested to provide information regarding the

interchangeability of domestic, subject, and nonsubject citric acid and certain citrate salts and to discuss

reasons for any opinions that the products were not interchangeable (table II-6). *** U.S. producers

reported that product from each of the country pairs was always interchangeable. Most importers

responded that citric acid and certain citrate salts from each of the different country sources were either

always interchangeable or frequently interchangeable. Most purchasers reported that product from each

of the country pairs was either always or frequently interchangeable. Reasons why product was not

always interchangeable included: interchangeability differs between customers or by end use; products

may behave differently based on the manufacturer and country of origin; only qualified product is

interchangeable; Chinese product is not consistent; some food ingredient customers require that no

ingredients originate in China; sometimes Chinese product is not as free-flowing/or cakes; Chinese 
II-19

Table II-6

Citric acid and certain citrate salts: Perceived interchangeability between citric acid and certain

citrate salts produced in the United States and in other countries, by country pairs

Country pair

 Number of U.S. 

 producers reporting

Number of U.S.

importers

reporting

Number of U.S.

purchasers

reporting

AFS N AFS N AFSN

U.S. vs. Canada *** *** *** *** 10 4 2 1 27 10 4 0

U.S. vs. China *** *** *** *** 10 4 4 1 23 13 9 2

Canada vs. China *** *** *** *** 7 4 3 1 19 10 8 1

U.S. vs. nonsubject *** *** *** *** 8 1 3 1 11 4 1 0

Canada vs. nonsubject *** *** *** *** 8 1 3 1 10 4 0 0

China vs. nonsubject *** *** *** *** 6 3 3 1 10 4 0 1

Note.--A = Always, F = Frequently, S = Sometimes, N = Never. Answers from firms that are both producers and

importers are included only with producers. Answers from firms that are both importers and purchasers are

included with purchasers if they do not sell citric acid in the form in which they purchase it, otherwise they are

included with importers.

Source: Compiled from data submitted in response to Commission questionnaires.

product is not as readily accepted; some customers will use Chinese product if it is at a lower price but

some will not use Chinese product; one customer is only completely happy with a specific granulation

from one (Chinese) producer; and GMO requirements.

Producers, importers, and purchasers were requested to provide information regarding the

significance of differences other than price for domestic, subject, and nonsubject citric acid and certain

citrate salts (table II-7). *** responding U.S. producers reported that there were never differences other

than price for all country pairs. The majority of importers in each case reported that there were at least

sometimes differences other than price for each pair, except for China vs. nonsubject countries, where

half of the responding importers reported there were never differences. Similarly, most purchasers

reported there were at least sometimes differences between products from every country pair. U.S.

product was reported to have better perceived quality, more uniform crystal size, less clumping, better

documentation specifications sheets, kosher certification, and certification of analysis. With regard to

Chinese product compared with U.S. product, the U.S. product was less available, Cargill was “sold out;”

the Chinese service small distributors; purchasers may be reluctant to use Chinese material; Chinese

product may not have been approved for use by purchasers; Chinese product has longer lead times; for

Chinese product availability is an issue; and Chinese product clumps more in the summer. Differences

between U.S. and Canadian citric acid and certain citrate salts included no distribution agreement with

Canada and different logistics. Differences between Canadian and Chinese product include: Canadian

product is available to cover the supply gaps if product from China is delayed; for Chinese product

availability is an issue; and the lack of availability from Canada. In addition, one purchaser reported that

its suppliers must fit its global strategy and one reported that Thailand was the only other source other

than China with product available.
II-20

Table II-7

Citric acid and certain citrate salts: Perceived importance of differences in factors other than price

between citric acid and certain citrate salts produced in the United States and in other countries in

purchases of citric acid and certain citrate salts in the U.S. market, by country pairs

Country pair

 Number of U.S. 

producers reporting

Number of U.S.

importers

reporting

Number of U.S.

purchasers reporting

AFS NAF S N A F SN

U.S. vs. Canada *** *** *** *** 3 0 6 4 9 3 14 12

U.S. vs. China *** *** *** *** 7 4 6 2 12 7 19 7

Canada vs. China *** *** *** *** 5 3 4 3 8 4 17 5

U.S. vs. nonsubject *** *** *** *** 2 1 3 2 4 1 75

Canada vs. nonsubject *** *** *** *** 2 1 2 3 3 1 63

China vs. nonsubject *** *** *** *** 1 0 3 4 5 0 66

Note.--A = Always, F = Frequently, S = Sometimes, N = Never. Answers from firms that are both producers and

importers are included only with producers. Answers from firms that are both importers and purchasers are

included with purchasers if they do not sell citric acid in the form in which they purchase it, otherwise they are

included with importers.

Source: Compiled from data submitted in response to Commission questionnaires.

Purchasers were also asked to compare domestically produced citric acid and certain citrate salts

and those produced in subject and nonsubject countries, with respect to 24 different attributes (table II-8). 

Thirty-eight firms compared U.S. and Canadian product, although not for all factors. The majority of

responding purchasers reported that these products were comparable for all factors except for availability

in solution form, for which only a plurality reported they were comparable. 

The majority of purchasers reported that U.S. and Chinese product were comparable for all

factors except availability in solution/liquid form (where most reported that the U.S. product was

superior); price (for which the majority of responding firms reported that the U.S. product was inferior,

i.e., higher in price); delivery time (for which more firms found U.S. product to be superior than found

U.S. and Chinese products to be comparable); and technical support (for which a plurality reported that

U.S. and Chinese product were comparable but almost as many firms reported that the U.S. product was

superior). Four purchasers compared Canadian and Chinese product. The majority of responding firms

agreed that the products from Canada and China were comparable on seven factors: availability as citric

acid, availability as potassium citrate, availability as sodium citrate, discounts offered, extension of credit,

packaging, and size of granulation. The Canadian product was reported to be superior in terms of 11

factors: availability in liquid form, delivery terms, delivery time, minimum quantity requirements, product

consistency, product range, quality meets FCC/USP standards, quality exceeds FCC/USP standards,

reliability of supply, technical support, and U.S. transportation cost. Most responding firms reported that

Canadian product was inferior in terms of availability in monohydrate form. Half the responding firms

reported that Canadian product was superior for availability. Half also reported that Chinese product was

superior on availability in anhydrous form. One firm reported that Canadian product was inferior and one

reported that Canadian product was comparable to Chinese product in terms of availability in dihydrate

form and availability of GMO product. For pricing, one firm each reported that Canadian product was

superior, comparable, and inferior to Chinese product. 
II-21

Table II-8

Citric acid and certain citrate salts: Comparisons of imported and U.S. product, as reported by

purchasers1

Factor

U.S. vs. 

Canada

U.S. vs. 

China

Canada

vs. 

China

U.S. vs. 

nonsubject

Canada vs.

nonsubject

China vs.

nonsubject

S C I S C I S C I S C I S C I SC I

Availability 5 26 7 10 25 14 2 1 1 1520 0 1120

Availability in anhydrous form 4 28 6 2 39 7 1 1 2 1510 0 1120

Availability as citric acid 4 28 5 6 34 7 0 3 1 0610 0 1120

Availability as potassium citrate 5 21 2 6 26 3 0 1 0 1410 0 0011

Availability as sodium citrate 5 23 3 7 28 6 0 2 1 1430 0 1120

Availability in dihydrate form 2 17 2 3 19 3 0 1 1 1210 0 1110

Availability in monohydrate form 3 15 3 3 18 7 0 1 2 0410 0 1120

Availability in solution/liquid

form 9 12 3 15 10 4 2 1 0 4 0 0 1 0 0 0 1 1

Delivery terms 6 29 1 15 29 2 3 1 0 2 6 0 0 1 0 0 2 1

Delivery time 9 26 1 23 22 4 3 0 0 5 4 0 1 0 0 0 2 1

Discounts offered 3 26 2 4 31 7 0 3 0 0700 1 0030

Extension of credit 4 24 3 9 28 3 1 2 0 1 6 0 0 1 0 0 3 0

Genetically modified inputs 2 23 2 2 24 9 0 1 1 0220 0 0020

Minimum quantity requirements 2 34 1 5 39 4 2 1 0 0900 1 0030

Packaging 2 36 0 5 43 0 0 4 0 1 7 0 0 1 0 0 3 0

Price2 6 19 9 8 13 24 1 1 1 1 3 4 1 0 0 1 2 0

Product consistency 4 34 0 13 35 1 3 1 0 1700 1 0021

Product range 3 29 1 12 29 1 3 0 0 3400 1 0021

Quality meets FCC/USP

standards 2 36 0 5 41 1 3 1 0 1800 1 0021

Quality exceeds FCC/USP

standards 2 29 0 7 33 0 2 1 0 1600 1 0021

Reliability of supply 4 29 4 10 32 7 3 0 0 1610 1 0021

Size of granulation 3 35 0 6 41 1 1 2 0 1710 1 0021

Technical support 3 31 2 20 21 4 3 0 0 2600 1 0021

U.S. transportation costs2 9 24 0 15 29 1 2 1 0 4 4 0 0 1 0 0 3 0

 1 Some firms reported answers for multiple nonsubject countries.

 2

 A rating of superior means that the price or cost is generally lower. For example, if a firm reported “U.S. superior,” it meant

that the price of the U.S. product was generally lower than the price of the imported product.

Note.--S=first listed country’s product is superior; C=both countries’ products are comparable; I=first listed country’s product is

inferior. Not all firms gave responses for all factors. 

Source: Compiled from data submitted in response to Commission questionnaires.
 94 Hearing transcript, pp. 22-24 (Baroni).

 95 Hearing transcript, p. 54 (Lorusso).

 96 Hearing transcript, p. 170 (Rainville).

 97 Hearing transcript, pp. 176-177 (Smith), 188 (Taylor).

 98 Hearing transcript, pp. 177-178 (Smith), 190 (Taylor).

 99 Hearing transcript, pp. 181-183 (Smith).

 100 Hearing transcript, p. 193 (Hofmann).

II-22

Nine purchasers compared U.S. product to nonsubject-country product. The majority of

responding purchasers reported that these products were comparable for 17 of the 24 specified factors. 

For availability in solution/liquid form and delivery time, most responding purchasers reported that the

U.S. product was superior. For price, half of the responding firms reported that U.S. product was inferior

(i.e., higher in price); for availability as sodium citrate, availability in dihydrate form, genetically

modified inputs, and U.S. transportation costs, half the firms reported that U.S. and nonsubject-country

product were comparable. 

One firm compared Canadian and nonsubject product, reporting that the products were comparable

for 13 factors; Canadian product was superior for availability in solution/liquid form, delivery time, and

price, and the Canadian product was inferior for availability, availability in anhydrous form, availability as

citric acid, availability as sodium citrate, availability in dihydrate form, and availability in monohydrate

form. 

Three purchasers compared Chinese product with that from nonsubject countries for the 24 factors. 

For 21 factors, the majority of responding purchasers reported that products from China and nonsubject

countries were comparable. For availability in dihydrate form, one firm each reported that the Chinese

product was superior and comparable, and for availability in solution/liquid form and availability as

potassium citrate, one each reported that the Chinese product was comparable and inferior.

Petitioners report that citric acid and certain citrate salts is a true commodity product and as such

price is a paramount factor in sales negotiations. “The only real issue to work out in our annual

negotiations with our customers is price.”94 Petitioners also report that all major world producers,

including the Chinese, produce the same quality of citric acid.95

JBL reported that it uses non-price factors in its sales, including premium product, the shortest lead

time, dependable delivery, and customer service. These factors reportedly allow it to sell at premium

prices.96 P&G and PepsiCo reported they must diversify their supply base to reduce the risk of plant

disruptions.97 P&G reported non-price differences between the Canadian and Chinese product, the

availability in solution form and shorter lead times which reduced possibility of delays, and the 

requirement to hold costly inventories.98 In addition, P&G contended that its delivered price for domestic

product was lower than the price for imported product from both Canada and China.99 Reckitt Benckiser

reported that it preferred purchasing domestic product for security and planning.100

ELASTICITY ESTIMATES

This section discusses elasticity estimates. Elasticity estimates were provided in the prehearing

report. The petitioners disagreed with the estimate of the elasticity of substitution in their prehearing and

posthearing briefs. No other party provided any comments in its briefs.
 101 A supply function is not defined in the case of a non-competitive market.

 102 Petitioners’ prehearing brief, exh. 20, p. 10 and petitioners’ posthearing brief, exh. 1, pp. 27-28.

II-23

U.S. Supply Elasticity101

The domestic supply elasticity for citric acid and certain citrate salts measures the sensitivity of the

quantity supplied by U.S. producers to changes in the U.S. market price of citric acid and certain citrate

salts. The elasticity of domestic supply depends on factors such as the availability of inputs, the level of

excess capacity, the level of inventories, and the availability of alternate markets for domestically

produced citric acid and certain citrate salts. Analysis of these factors indicates that the U.S. industry has

somewhat limited excess capacity, relatively low levels of inventories, and a moderate level of export

shipments which could be used to increase domestic shipments in response to price increases. A supply

elasticity in the range of 1 to 3 is suggested.

U.S. Demand Elasticity

The U.S. demand elasticity for citric acid and certain citrate salts measures the sensitivity of the

overall quantity demanded to a change in the U.S. market price of citric acid and certain citrate salts. This

sensitivity depends on the availability and viability of substitute products as well as on the component

share of citric acid and certain citrate salts in the production of downstream products. Demand is

estimated to be inelastic and is likely to be in the -0.2 to -0.7 range.

Substitution Elasticity

The elasticity of substitution depends on the extent of product differentiation between the domestic

and imported products. Product differentiation depends on factors such as the range of products produced,

quality, availability, and reliability of supply. In the prehearing report, the elasticity of

substitution for imports from the subject countries was estimated to be in the range of 2 to 6, with the

Chinese product more likely to be at the lower end of this range and the Canadian product at the higher

end. 

The petitioners report that in view of the price sensitivity of citric acid and the increases in the

market share of the Chinese industry in both the U.S. and world markets, a substitution elasticity of 2 is

too low. They report that the minimum elasticity of substitution for Chinese product should be at least 4. 

Petitioners also did not believe that the elasticities of substitution differ much between Chinese and

Canadian product.102

The petitioners’ estimates of elasticity of substitution are within those proposed by staff. They,

however, propose interpreting the worldwide growth in Chinese sales as resulting mainly from price rather

than any other reason. Staff continues believe that an estimate for the elasticity of substitution ranging

between 2 to 6 percent is reasonable. 

 1

 In the 2000 investigation, the Commission determined that U.S. firms that purchased citric acid and converted it

into sodium citrate solution did not engage in sufficient production-related activities to warrant inclusion in the

domestic industry, finding that conversion costs and technical expertise required in the conversion process were

minimal. Citric Acid and Sodium Citrate From China, Inv. No. 731-TA-863 (Preliminary), USITC Publication 3277,

February 2000, p. 8. In the preliminary phase of these investigations, petitioners contended that the nature of these

converters has not changed since 2000, and that they should again be excluded from the domestic industry. 

Petitioners’ postconference brief, p. 5. No respondent advocated including converters in the domestic industry. 

Chinese respondents’ postconference brief, p. 6. The Commission did not revisit this issue in the preliminary phase

of these investigations. Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and

731-TA-1151-1152 (Preliminary), USITC Publication 4008, June 2008, p. 12, fn. 74. Commission staff did not

collect data regarding converting operations. 

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

Information presented in this section of the report is based on (except as noted) the questionnaire

responses of three firms which accounted for all U.S. production of citric acid and certain citrate salts in

2008. 

U.S. PRODUCERS

The Commission sent producer’s questionnaires to three firms identified in the petition as U.S.

producers of citric acid and certain citrate salts. All three firms submitted responses.1

 Table III-1

presents the list of U.S. producers with each company’s U.S. production location, share of U.S.

production in 2008, and position on the petition.

Table III-1

Citric acid and certain citrate salts: U.S. producers, U.S. production locations, shares of U.S.

production in 2008, and positions on the petition

Firm Production location

Share of

production

(percent)

Position on the 

petition

ADM1 Southport, NC *** Petitioner

Cargill2 Eddyville, IA *** Petitioner

Tate & Lyle3 Decatur, IL *** Petitioner

 1 ***. 

 2 ***.

 3 ***. 

Source: Compiled from data submitted in response to Commission questionnaires.
 2

 A number of U.S. importers reported that after the imposition of preliminary duties on U.S. imports from China,

they could no longer afford to import citric acid or citrate salts from China, but were also unable to acquire necessary

volumes of product from U.S. producers. ***; see also Chinese respondents’ prehearing brief, pp. 11-12.

 3

 Both ADM and Cargill produced citric acid, sodium citrate, and potassium citrate during the period of

investigation. Tate & Lyle produced only citric acid. ***.

 4

 ***.

 5

 ***. The petitioners described the episode as follows: ***. Petitioners claim that respondents are exaggerating

the impact of this event on the ability of the U.S. industry to supply the market. Petitioners’ prehearing brief, pp. 18-

19.

III-2

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Data on U.S. producers’ capacity, production, and capacity utilization are presented in table III-2. 

Total U.S. capacity remained steady from 2006 to 2008. U.S. capacity was equivalent to *** percent of

apparent U.S. consumption of citric acid and certain citrate salts in 2008.2

 Total U.S. production of the

subject product increased by 6.8 percent from 2006 to 2008.3

 Capacity utilization ranged from 85.8

percent in 2006 to 91.7 percent in 2008.4

 None of the three U.S. producers reported any events that

occurred during the period of investigation that would have materially affected their production or

capacity.5

 None of the three U.S. producers reported that they produced other products using the same

manufacturing equipment and/or production employees that were used to produce citric acid and certain

citrate salts.

Table III-2

Citric acid and certain citrate salts: U.S. producers’ capacity, production, and capacity utilization,

2006-2008

Item

Calendar year

2006 2007 2008

Capacity (1,000 dry pounds)

ADM *** *** ***

Cargill *** *** ***

Tate & Lyle *** *** ***

 Total 553,913 553,913 553,913

Production (1,000 dry pounds)

ADM *** *** ***

Cargill *** *** ***

Tate & Lyle *** *** ***

 Total 475,428 488,403 507,917

Capacity utilization (percent)

ADM *** *** ***

Cargill *** *** ***

Tate & Lyle *** *** ***

 Average 85.8 88.2 91.7

Source: Compiled from data submitted in response to Commission questionnaires.
 6

 ***.

 7

 Petitioners project a *** in exports in 2009, with a shift of almost *** of their 2008 exports to the U.S. market

in 2009. Petitioners’ posthearing brief, Responses to Questions from Commissioner Lane, p. 17.

III-3

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORT SHIPMENTS

As detailed in table III-3, the volume of U.S. producers’ U.S. shipments of citric acid and certain

citrate salts increased by 9.0 percent from 2006 to 2008.6

 The value of U.S. shipments also increased by

30.1 percent during the same time period. ***. *** volumes that were transfers to related firms during

the period of investigation. ***. *** reported export shipments ***. Export shipments from U.S.

producers increased by 16.8 percent, by quantity, and 40.2 percent, by value, from 2006 to 2008.7

 ***.

*** reported export shipments to ***. *** reported export shipments to ***. 
III-4

Table III-3

Citric acid and certain citrate salts: U.S. producers’ shipments, by types, 2006-2008

Item

Calendar year

2006 2007 2008

Quantity (1,000 dry pounds)

Commercial shipments *** *** ***

Internal consumption *** *** ***

Transfers to related firms *** *** ***

 U.S. shipments 369,451 399,578 402,518

Export shipments 96,709 114,348 112,996

 Total shipments 466,160 513,926 515,514

Value ($1,000)

1

Commercial shipments *** *** ***

Internal consumption *** *** ***

Transfers to related firms *** *** ***

 U.S. shipments 165,013 180,132 214,641

Export shipments 41,042 47,381 57,541

 Total shipments 206,055 227,513 272,182

Unit value (per dry pound)

Commercial shipments $*** $*** $***

Internal consumption *** *** ***

Transfers to related firms *** *** ***

 U.S. shipments 0.45 0.45 0.53

Export shipments 0.42 0.41 0.51

 Average 0.44 0.44 0.53

Share of shipment quantity (percent)

Commercial shipments *** *** ***

Internal consumption *** *** ***

Transfers to related firms *** *** ***

 U.S. shipments 79.3 77.8 78.1

Export shipments 20.7 22.2 21.9

 Total 100.0 100.0 100.0

 1 F.o.b. U.S. point of shipment.

Source: Compiled from data submitted in response to Commission questionnaires.
 8

 ***.

 9

 ***.

III-5

U.S. PRODUCERS’ IMPORTS AND PURCHASES OF IMPORTS

*** U.S. producers, ***, reported that it directly imported or purchased from U.S. importers

citric acid or certain citrate salts from Canada or China during the period of investigation. Table III-4

presents *** direct imports of subject product from ***, its U.S. production, and the ratio of its U.S.

imports to its U.S. production.8

Table III-4

Citric acid and certain citrate salts: U.S. producers’ subject imports and purchases of subject

imports, 2006-2008

* * * * * * *

U.S. PRODUCERS’ INVENTORIES

Data on end-of-period inventories of citric acid and certain citrate salts for the period of

investigation are presented in table III-5.

Table III-5

Citric acid and certain citrate salts: U.S. producers’ end-of-period inventories, 2006-2008

Item

Calendar year

2006 2007 2008

Inventories (1,000 dry pounds) 77,606 52,316 44,638

Ratio to production (percent) 16.3 10.7 8.8

Ratio to U.S. shipments (percent) 21.0 13.1 11.1

Ratio to total shipments (percent) 16.6 10.2 8.7

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Data provided by U.S. producers on the number of production and related workers (“PRWs”)

engaged in the production of citric acid and certain citrate salts, the total hours worked by such workers,

and wages paid to such PRWs during the period for which data were collected in these investigations are

presented in table III-6. From 2006 to 2008, the number of PRWs decreased by 4.6 percent,9

 hours worked

decreased by 4.5 percent, wages paid decreased by 4.0 percent, hourly wages increased by 0.5 percent,

productivity increased by 11.8 percent, and unit labor costs decreased by 10.1 percent.
III-6

Table III-6

Citric acid and certain citrate salts: Average number of production and related workers producing

citric acid and certain citrate salts, hours worked, hours worked per worker, wages paid to such

employees, and hourly wages, productivity, and unit labor costs, 2006-2008

Item

Calendar year

2006 2007 2008

PRWs (number) 306 300 292

Hours worked (1,000) 701 687 669

Hours worked per worker 2,291 2,290 2,291

Wages paid ($1,000) 22,656 21,781 21,751

Hourly wages $32.34 $31.70 $32.50

Productivity (pounds per hour) 678.6 710.8 758.9

Unit labor costs (per pound) $0.05 $0.04 $0.04

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 The Commission sent questionnaires to those firms identified in the petition, along with firms that, based on a

review of data provided by U.S. Customs and Border Protection (“Customs”), may have imported citric acid or

certain citrate salts since 2006. The Commission also identified potential U.S. importers or purchasers from U.S.

customer lists provided by questionnaire respondents in the preliminary phase of these investigations.

 2

 In addition to the 30 usable responses (those respondents are shown in table IV-1), the Commission received

responses from *** indicating that they did not import citric acid or certain citrate salts during the period of

investigation. A number of the firms listed above are purchasers of the subject product and did submit U.S.

purchasers’ questionnaires.

 3

 ***. 

 4

 Data for U.S. imports from China and nonsubject imports are compiled using HTS subheadings 2918.14.00

(citric acid), 2918.15.10 (sodium citrate), and 2918.15.50 (potassium citrate). During the preliminary phase of these

investigations, petitioners stated that they were unaware of any U.S. imports of blends of citric acid or crude calcium

citrate during the period of investigation. See Citric Acid and Certain Citrate Salts from Canada and China, Inv.

nos. 701-TA-456 and 731-TA-1151-1152 (Preliminary), USITC Publication 4008, June 2008, p. 13, fn. 79. 

U.S. imports from China and nonsubject countries may be somewhat overstated on a dry-weight basis. A

small volume (approximately 7 percent) of such imports consist of citric acid in the monohydrate form, which

contains only approximately 92 percent of citric acid by weight.

IV-1

PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

The Commission sent importer questionnaires to 158 firms believed to be U.S. importers or U.S.

purchasers of citric acid and certain citrate salts, as well as to all three U.S. producers.1

 Usable

questionnaire responses were received from 31 firms, which accounted for 100 percent of U.S. imports

from Canada, 86.5 percent of U.S. imports from China, and 55.9 percent of U.S. imports from nonsubject

countries in 2008.2

 Data for U.S. imports from Canada are compiled using the reported U.S. imports of

Jungbunzlauer Technology GmbH & Co. (“JBL”), the U.S. importer of Canadian product which

accounted for *** U.S. imports from Canada, ***.3

 Data for U.S. imports from China and nonsubject

countries are compiled using official Commerce statistics.4

Table IV-1 lists all responding U.S. importers of citric acid and certain citrate salts from Canada

and China, their U.S. locations, and their quantities of imports, by source, in 2008.

Table IV-1

Citric acid and certain citrate salts: Reported U.S. imports, by importers and by sources of

imports, 2008

* * * * * * *

U.S. IMPORTS

Table IV-2 shows that the volume of U.S. imports of citric acid and certain citrate salts from

Canada increased by *** percent from 2006 to 2008. The value of U.S. imports from Canada increased

by *** percent during the same period. The volume of U.S. imports of citric acid and certain citrate salts

from China increased by 21.9 percent from 2006 to 2008. The value of U.S. imports from China

increased by 80.6 percent during the same period. The volume of U.S. imports from nonsubject countries

decreased by 18.9 percent from 2006 to 2008. The value of U.S. imports from nonsubject countries

increased by 4.8 percent during the same period. The following countries, listed in descending order of

reported import volume, accounted for approximately 94 percent of U.S. imports from nonsubject

countries in 2008: Israel, Colombia, Germany, Thailand, Austria, and Belgium. 
IV-2

Table IV-2

Citric acid and certain citrate salts: U.S. imports, by sources, 2006-2008

Source

Calendar year

2006 2007 2008

Quantity (1,000 dry pounds)

Canada *** *** ***

China 158,906 180,108 193,727

 Subtotal *** *** ***

All others 68,584 65,634 55,594

 Total *** *** ***

Value ($1,000)

1

Canada *** *** ***

China 65,542 76,571 118,342

 Subtotal *** *** ***

All others 39,174 38,802 41,058

 Total *** *** ***

Unit value (per dry pound)

Canada $*** $*** $***

China 0.41 0.43 0.61

 Average *** *** ***

All others 0.57 0.59 0.74

 Average *** *** ***

Share of quantity (percent)

Canada *** *** ***

China *** *** ***

 Subtotal *** *** ***

All others *** *** ***

 Total 100.0 100.0 100.0

Share of value (percent)

Canada *** *** ***

China *** *** ***

 Subtotal *** *** ***

All others *** *** ***

 Total 100.0 100.0 100.0

 1 Landed, duty-paid.

Source: U.S. imports from Canada are compiled from U.S. importer questionnaires. U.S. imports from China and nonsubject countries are

compiled from official Commerce statistics.
 5

 Petitioners’ prehearing brief, pp. 6-10; Petitioners posthearing brief, exh. 1, p. 19.

 6 JBL Canada’s prehearing brief, pp. 19-30; JBL Canada’s posthearing brief, p. 7 (addressing cumulation in the

context of the Commission’s threat of material injury analysis).

 7 Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and 731-TA-1151-1152

(Preliminary), USITC Publication 4008, June 2008, p. 20.

 8

 Chinese respondents’ posthearing brief, app. A, pp. 24-25 (addressing cumulation in the context of the

Commission’s threat of material injury analysis). In the preliminary phase of these investigations, Chinese

respondents argued that the Commission should not cumulate U.S. imports from Canada and China. Chinese

respondents’ postconference brief, p. 6.

 9

 Petitioners’ prehearing brief, pp. 6-10.

 10 JBL Canada’s prehearing brief, pp. 19-30.

 11 A direct rail line between JBL’s production facility and P&G’s production facilities in Lima, OH and

Alexandria, LA, allows JBL to economically ship citric acid in solution form. P&G claims that shipping citric acid

in solution form from China would be economically unfeasible due to high transportation costs. P&G’s prehearing

brief, p. 70. P&G stated that it also purchases and uses citric acid in monohydrate and anhydrous forms in the

production of its detergents; however, it must first convert them to solutions, requiring additional time and cost. 

Conference transcript, p. 103 (Smith).

 12 ***.

IV-3

CUMULATION CONSIDERATIONS

Petitioners argued that the Commission should cumulate U.S. imports from Canada and China.5

JBL Canada urged the Commission not to cumulate these imports.6

 The Commission preliminarily

determined that there was a reasonable overlap of competition among subject imports and the domestic

like product, and therefore, cumulatively assessed the volume and price effects of Canada and China.7

 In

the final phase of these investigations, Chinese respondents state that they believe there is no grounds to

reverse the Commission’s preliminary findings with regard to cumulation.8

 

In assessing whether imports should be cumulated, the Commission determines whether U.S.

imports from the subject countries compete with each other and with the domestic like product and has

generally considered four factors: (1) fungibility, (2) presence of sales or offers to sell in the same

geographical market, (3) common or similar channels of distribution, and (4) simultaneous presence in the

market. Issues concerning channels of distribution are addressed in Part II of this report. The remaining

factors are addressed below.

Fungibility

Petitioners argued that citric acid and certain citrate salts whether originating from Canada,

China, or the United States are a very fungible, commodity product produced to the same grades and

standards.9

 JBL Canada argued that U.S. imports from Canada are not fungible with those from China

because despite being a commodity product, certain characteristics prevented the two products from

actually being interchangeable in various end use market segments in the United States.10 Among these

characteristics, JBL Canada cited the fact that the proximity of its production facility to the United States

allowed it to ship citric acid in solution form with short lead times to large customers such as P&G, which

uses citric acid solution in its production of detergents.11 JBL reported that in 2008, *** percent of its

U.S. imports were in solution form while *** percent were in anhydrous form. *** U.S. importer

reported importing subject product in solution form from China. U.S. producers reported that in 2008,

*** percent of their U.S. commercial shipments consisted of anhydrous and dihydrate citric acid or citrate

salts while *** percent of 2008 commercial shipments consisted of citric acid in solution form.12 
 13 JBL Canada’s prehearing brief, pp. 21-23. Both citric acid from Canada and China generally meet the

FCC/USP standards; however, JBL argued that its consistency both in quality product and customer service make its

“brand” a premium one. See also Conference transcript, p. 124 (Waite). Petitioners argue that reported pricing data

and purchaser perceptions of Canadian product undermine Canadian respondent’s claim of a premium “brand”

product. Petitioners’ prehearing brief, p. 16.

 14 P&G’s prehearing brief, pp. 68-69.

 15 Petitioners’ posthearing brief, exh. 1, p. 26; JBL’s posthearing brief, exh. 8, p. 1. JBL estimates that *** to ***

percent of the global market for citric acid is for non-GMO citric acid. Ibid.

 16 Chinese respondents’ postconference brief, pp. 9-10. See also Chinese respondents’ prehearing brief, pp. 28-

29. Asked at the preliminary conference, a witness for Chinese respondents had no knowledge of any shipping

methods that would prevent the caking of anhydrous citric acid. Conference transcript, p. 132 (Hsu). Petitioners

argued that the caking issue was being greatly exaggerated by respondents and would not occur with proper

packaging, such as packing at correct temperatures and moisture levels into bags with proper moisture barriers. 

Petitioners’ postconference brief, exh. 1, p. 23 & exh. 13 (statement of L. Martin Hurt, Senior Product Manager,

Tate & Lyle); Petitioners’ prehearing brief, p. 9 (“caking is not a common occurrence”).

 17 PepsiCo’s prehearing brief, pp. 12-13. PepsiCo reported that ***. Ibid.

 18 For an extensive discussion of U.S. purchasers reported experiences with “caking,” please see the section

entitled “Caking” in Part II of this report.

 19 Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-456 and 731-TA-1151-1152

(Preliminary), USITC Publication 4008, June 2008, p. 19.

IV-4

JBL Canada claimed that its product did not compete with U.S. imports from China because its

products are perceived in the U.S. market as a “premium product” in terms of purity, color, grade, and

customer and technical assistance relative to the Chinese product and, unlike product from China,

Canadian product is currently *** in the U.S. food and beverage market, especially ***, as opposed to the

U.S. industrial market where *** of the Chinese product is used.13 

P&G argued that U.S. imports from Canada and China are not fungible because a number of end

users prefer Chinese product as it is produced with non-genetically modified (“GMO”) corn whereas U.S.

and Canadian product are made with GMO corn.14 Petitioner and Canadian respondent estimate that

approximately *** percent of the U.S. citric acid market is non-GMO citric acid.15 

Chinese respondents argued that U.S. imports from China, although not entirely excluded from

the large U.S. food and beverage market, are effectively excluded from the large U.S. soft drink market

because product shipped from China in anhydrous (dry powder) form will generally “cake” by the time it

reaches the U.S. market as a result of the moisture it absorbs from its trans-Pacific shipping.16 PepsiCo

stated that ***.17 A number of U.S. purchasers of citric acid and certain citrate salts have reported

“caking” issues with Chinese products.18 There was no reported caking of U.S.-produced citric acid or

citric acid imported from Canada (*** percent of which was shipped in solution form in 2008). 

In the preliminary phase of these investigations, the Commission determined that there was

sufficient fungibility among the products to cumulate, stating “although there are some differences in

terms of chemical and physical forms and grades sold by domestic, Canadian, and Chinese producers in

the U.S. market, there is also at least some overlap, particularly for anhydrous citric acid. Moreover, all

three sources competed for sales of food, beverage, pharmaceutical, and industrial-grade products in the

U.S. market during the period of investigation (including for soft drink applications).”19

End-Use Market Segments

Table IV-3 shows estimated 2008 U.S. shipment data grouped by end-use market segment. The

domestic industry reported that *** percent of its U.S. shipments in 2008 were estimated to be used in the

food and beverage market segment (*** percent for the soft drink sub-segment), *** percent to the
 20 Petitioners’ postconference brief, exh. 15 and p. 12.

 21 Ibid.; Respondent JBL’s postconference brief, p. 11. There is a direct rail line between JBL Canada’s

production facility and P&G’s production facilities in Lima, OH and Alexandria, LA. Respondent P&G’s

postconference brief, p. 28.

 22 Petitioners’ prehearing brief, p. 10.

 23 JBL’s prehearing brief, p. 25; JBL’s posthearing brief, p. 9.

IV-5

industrial segment, *** percent to the pharmaceutical segment, and *** percent were unknown or were

sold to general distributors. For U.S. shipments of imports from Canada, *** percent were estimated to

be used in the food and beverage segment (*** percent for the soft drink sub-segment), *** percent to the

industrial segment, *** percent to the pharmaceutical segment, and *** percent were unknown or were

sold to general distributors. For U.S. shipments of imports from China, *** percent were estimated to be

used in the food and beverage segment, (*** percent for the soft drink sub-segment), *** percent to the

industrial segment, *** percent to the pharmaceutical segment, and *** percent were unknown or were

sold to general distributors. 

Table IV-3

Citric acid and certain citrate salts: Estimated 2008 U.S. commercial shipments, by end-use

market segment, and by firm 

* * * * * * *

Geographical Markets 

With regard to geographical market overlap, U.S. imports of citric acid and certain citrate salts

from China entered multiple U.S. ports of entry, dispersed across the nation. The five U.S. ports of entry

with the most volume were: (1) Los Angeles, CA; (2) New Orleans, LA; (3) Chicago, IL; (4) San

Francisco, CA; and (5) New York, NY. Petitioners argue that the Chinese product is available

nationwide.20 

U.S. imports of citric acid and certain citrate salts from Canada generally enter the United States

through one of two ports of entry, namely Buffalo, NY or Detroit, MI, because of their proximity to JBL

Canada’s manufacturing facility in Port Colborne, Ontario. During the preliminary phase of these

investigations, petitioners and respondent JBL Canada both observed that although product from Canada

enters through two U.S. ports of entry, when transported by freight or rail, it competes nationwide with

U.S. and Chinese product.21

Simultaneous Presence in the Market

With regard to simultaneous presence in the market, petitioners state that imported citric acid and

certain citrate salts from both Canada and China have been simultaneously present in the U.S. market

along with domestic product during the period of investigation.22 The Canadian respondent stated that

Canadian and Chinese product are not simultaneously present in the same markets because the use of each

product in different market segments (by end use and customer type) attenuates competition between

product from Canada and product from China.23 Commerce statistics and pricing data submitted to the

Commission show that imports from Canada and China entered the United States in every month of the

period of investigation.
 24 19 U.S.C. § 1677(24)(A)(ii).

IV-6

NEGLIGIBILITY

The Tariff Act of 1930 provides for the termination of an investigation if imports of the subject

product from a country are less than 3 percent of total imports, or, if there is more than one such country,

their combined share is less than or equal to 7 percent of total imports, during the most recent 12 months

for which data are available preceding the filing of the petition.24 The shares (in percent) of the total

quantity of U.S. imports from Canada and China for the period of January 2007 through December 2007

using U.S. import data compiled from the Commission’s questionnaire responses (in the case of U.S.

imports from Canada) and data compiled from Commerce statistics (in the case of China and nonsubject

countries) were *** percent and *** percent, for Canada and China, respectively, well above the 3

percent negligibility threshold.

APPARENT U.S. CONSUMPTION

Data on apparent U.S. consumption of citric acid and certain citrate salts are presented in table

IV-4. The quantity of apparent U.S. consumption of the subject product increased by *** percent from

2006 to 2008. The value of apparent U.S. consumption increased by *** percent during the same period. 
IV-7

Table IV-4

Citric acid and certain citrate salts: U.S. shipments of domestic product, U.S. imports by sources,

and apparent U.S. consumption, 2006-2008

Item

Calendar year

2006 2007 2008

Quantity (1,000 dry pounds)

U.S. producers’ U.S. shipments 369,451 399,578 402,518

U.S. imports from--

 Canada *** *** ***

 China 158,906 180,108 193,727

 Subtotal *** *** ***

 All other countries 68,584 65,634 55,594

 Total imports *** *** ***

Apparent U.S. consumption *** *** ***

Value ($1,000)

U.S. producers’ U.S. shipments 165,013 180,132 214,641

U.S. imports from--

 Canada *** *** ***

 China 65,542 76,571 118,342

 Subtotal *** *** ***

 All other countries 39,174 38,802 41,058

 Total imports *** *** ***

Apparent U.S. consumption *** *** ***

Note.–U.S. import data are on a landed, duty-paid basis, whereas U.S. producers’ shipments consist of U.S. producers’ f.o.b.

shipments to their customers. Accordingly, the two sets of data are for different levels of trade.

Source: Data regarding the U.S. industry are compiled from data submitted in response to Commission questionnaires. U.S.

imports from Canada are compiled from U.S. importer questionnaires. U.S. imports from China and nonsubject countries are

compiled from official Commerce statistics.
IV-8

U.S. MARKET SHARES

Data on U.S. market shares for citric acid and certain citrate salts are presented in table IV-5. 

From 2006 to 2008, U.S. producers lost *** percentage points of market share based on quantity and ***

percentage points based on value. U.S. imports from Canada gained *** percentage points of U.S.

market share from 2006 to 2008, based on quantity, and *** percentage points based on value. U.S.

imports from China gained *** percentage points of U.S. market share from 2006 to 2008, based on

quantity, and *** percentage points based on value. From 2006 to 2008, U.S. imports from nonsubject

countries lost *** percentage points of U.S. market share based on quantity and *** percentage points

based on value. 

Table IV-5

Citric acid and certain citrate salts: Apparent U.S. consumption and market shares, 2006-2008

* * * * * * *

RATIO OF IMPORTS TO U.S. PRODUCTION

Data on the ratio of imports to U.S. production of citric acid and certain citrate salts are presented

in table IV-6.

Table IV-6

Citric acid and certain citrate salts: U.S. production, U.S. imports, and ratios of imports to

production, 2006-2008

Item

Calendar year

2006 2007 2008

Quantity (1,000 dry pounds)

U.S. production 475,428 488,403 507,917

U.S. imports from--

 Canada *** *** ***

 China 158,906 180,108 193,727

 Subtotal *** *** ***

 All other countries 68,584 65,634 55,594

 Total imports *** *** ***

Ratio of imports to U.S. production (percent)

U.S. imports from--

 Canada *** *** ***

 China 33.4 36.9 38.1

 Subtotal *** *** ***

 All other countries 14.4 13.4 10.9

 Total imports *** *** ***

Source: Data regarding the U.S. industry are compiled from data submitted in response to Commission questionnaires. U.S.

imports from Canada are compiled from U.S. importer questionnaires. U.S. imports from China and nonsubject countries are

compiled from official Commerce statistics.
 *** U.S. producers reported that they had hedged against changes in the price of corn since 2006. ***. Only 1

one of the 28 responding importers, ***, reported hedging.

 See Bureau of Labor Statistics Producer Price Index PCU2211--2211–, “Electric power generation, 2

transmission, and distribution.”

 Petition, p. 10. 

3

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

The principal raw materials used for producing citric acid and certain citrate salts are the

“substrate” (a starch or sugary base that ferments into citric acid) and energy. The costs of both

substrates and energy generally rose since January 2006 but declined since mid-2008. U.S. producers

hedge corn prices to some degree. The prices of electric power generation, transmission, and 1

distribution rose by 10.6 percent from January 2006 to December 2008. 

2

U.S. and Canadian producers use corn (and sometimes other feedstocks such as molasses) as the

substrate. Chinese producers, on the other hand, use a variety of bases including sweet potato powder, 

tapioca, wheat, and corn. U.S. corn prices are shown in figure V-1. 3

Figure V-1

U.S. corn prices: Monthly price of No. 2 yellow corn in Central Illinois, January 2006 through

December 2008

Source: United States Department of Agriculture, Economic Research Service, at

http://www.ers.usda.gov/data/feedgrains/standardreports/ybtable12.htm, retrieved April 6, 2009.

Thirty-two of 64 responding purchasers, including ***, reported that the spike in the corn price

had not affected the price of citric acid and certain citrate salts. ***.
 4

 The only importer that reported using corn futures prices reported that the Chinese supplier will pass the corn

price increase on to the importer.

 5

 Petitioners’ posthearing brief, exh. 2, pp. 18-19.

 6

 *** submitted both producers’ and importers’ questionnaires in these investigations. For purposes of this

chapter, their answers (with the exception of pricing data and lost sales/lost revenues allegations) were the same for

both questionnaires submitted by their firm. Thus, in this chapter, their responses have been counted only among

producers.

 7

 The remaining two reporting shipping costs reported that transportation costs were 15 and 64 percent of total

costs. 

V-2

*** U.S. producers and 29 of 30 responding importers reported that they did not use corn futures

prices in determining the contract prices of citric acid and certain citrate salts.4

 Sixteen of 62 responding

purchasers reported that negotiations of contract prices are affected by the price of corn futures. The most

common reason given by these purchasers was that higher corn future prices reflected higher future costs

for the producers of citric acid and certain citrate salts. ***.

Petitioners report that their contracts did not include price escalator clauses during the 2006 to

2008 period; however, ***. Petitioners assert that until 2007, when prices increased dramatically, the

lack of escalators was not a problem.5

Transportation Costs to the U.S. Market

Transportation costs for citric acid and certain citrate salts from Canada to the United States

(excluding U.S. inland costs) are estimated to be approximately 4.0 percent of the total cost for citric acid

and certain citrate salts. For China, transportation costs for citric acid and certain citrate salts are

estimated to be approximately 13.0 percent of the total cost for citric acid and certain citrate salts. These

estimates are derived from official import data and represent the transportation and other charges on

imports valued on a c.i.f. basis, as compared with customs value.

U.S. Inland Transportation Costs

Among U.S. producers,6

 U.S. inland transportation costs ranged from *** to *** percent. ***

U.S. producers reported that they arrange transportation for their customers. U.S. producers reported that

between *** and *** percent of their sales were to customers located between 100 and 1,000 miles of

their production facilities; *** to *** percent were more than 1,000 miles from their production facilities,

and *** to *** percent of their sales were within 100 miles of their production facilities.

Eighteen of the 20 responding importers indicated that U.S. inland transportation costs ranged

between 1 to 10 percent.7

 Twenty-three of the 26 responding importers reported that they arranged

transportation for their customers, while three reported that their customers arrange transportation. 

Thirteen of the 24 responding importers reported selling half or more of their product between 0 and 100

miles from their U.S. points of shipment, 11 reported selling half or more of their product between 101

and 1,000 miles from their U.S. points of shipment, and one reported selling most of their product over

1,000 miles from its U.S. point of shipment.

Exchange Rates

The nominal and real values of the Canadian dollar and the nominal value of the Chinese yuan

relative to the U.S. dollar are presented in figure V-2.
V-3

Figure V-2

Exchange rates: Indices of the nominal and real exchange rates, where available, between the

currencies of Canada and China and the U.S. dollar, by quarters, January 2006-December 2008

Source: International Monetary Fund, International Financial Statistics online, www.imfstatistics.org/imf/ retrieved

March 12, 2009, and staff calculations.

C hina

0

20

40

60

80

100

120

140

2006

20072008

Jan.-Mar. 2006 = 100

Nominal

Canada

0

20

40

60

80

100

120

140

2006

2007

2008

Jan.-Mar. 2006 = 100

Nom inal Real
 8

 ***.

 9

 Conference transcript, pp. 103-104 (Smith). P&G reported that sales of liquid citric acid can reduce production

costs by eliminating the need to fully dry the product and by making solution from output that does not meet industry

standards for particle sizes. This enables producers to dry batches faster in spite of the increased amount of nonstandard sized material this creates. Hearing transcript, pp. 178-179 (Smith).

 10 Staff conversation with ***; and petition, p. 9.

 11 ***.

 12 JBL *** contends that it is not true for ***. JBL’s prehearing brief, p. 10.

V-4

PRICING PRACTICES

Pricing Methods

Citric acid is sold dry in powder, fine granulated, and granulated forms. ***.8

 As a liquid, citric

acid can be sold in an industrial grade that is 50 percent citric acid and 50 percent water, with the price

usually being about 50 percent of the equivalent dry price.9

 Similarly, anhydrous material costs about 9

percent less than monohydrate due to the presence of 9 percent more water in the monohydrate version.10

Price Determination

Among producers, *** reported using customer-by-customer negotiations to determine price,

while *** reported determining price by “what the market will bear.” *** reported using price lists for

their sales of citric acid and certain citrate salts. Similarly, importers reported using a variety of methods

including transaction-by-transaction negotiations and contracts for multiple shipments. Six importers

reported using a cost-plus method, adding profits of 3 to 10 percent to costs to determine the price. Three

other importers reported basing prices on what competitors were charging or what the market would bear. 

Among importers, only *** reported using a price list.11

Purchasers were asked if contract negotiations differed between suppliers of U.S. citric acid and

certain citrate salts and suppliers of citric acid and certain citrate salts from other countries. No purchaser

reported that negotiations differed between U.S. and Canadian suppliers, seven firms reported that

negotiations differed between the U.S. and Chinese suppliers, and four firms reported that negotiations

differed between the U.S. and nonsubject suppliers. Differences reported by the purchasers included: 

U.S. producers honor their obligations whereas Chinese suppliers are less likely to do so; U.S. producers

tend to have a set price for distributors and usually give notice on price increases, while Chinese and

nonsubject suppliers change prices order-to-order without notice; Chinese sales are volume and

relationship driven while domestic prices are based on market conditions and return on investment;

domestic suppliers typically give a general distribution price or a price determined by competitive activity

at their customers’ level and agree to supply a certain volume, whereas Chinese and nonsubject suppliers

just quote a price; U.S. producers prefer annual negotiations with “take it or leave it” prices, while

Chinese firms’ prices are subject to re-negotiation; U.S. product is sold on contracts while Chinese

product is sold in spot sales; Chinese and other suppliers are more apt than U.S. producers to negotiate

spot sales; and the Canadian supplier “prefers annual bids but will not typically firm a price all year.”12

***.

Long-Term Contracts

Most contracts are annual and U.S. producers report that in this industry 12-month contracts are

considered to be long-term. *** U.S. producers, all 10 responding importers, and all 39 responding
 13 Some purchasers reported that long-term contracts ranged from 12 months to as long as 3 years. For example,

Vertellus reported a two-year contract with Tate and Lyle. Hearing transcript, p. 199 (Pensak). Questionnaire

responses show annual price negotiations in these multi-year contracts. ***.

 14 Pricing data for citrate salts by spot and contract were not reported separately. 

V-5

purchasers reported that their typical long-term contracts were 12 months in duration. *** and four

purchasers, including ***, reported contracts that were longer than one year in duration.13

Cargill reported selling *** percent of its citric acid and certain citrate salts on long-term

contracts, Tate & Lyle *** percent, and ADM *** percent on long-term contracts. JBL reported selling

*** percent of its Canadian product using long-term contracts. Seven importers of Chinese product

reported using long-term contracts; five of these reported selling half or more of their product using longterm contracts. Most sales of the citric acid pricing products were contract sales. U.S. sales of these

products were contract sales for over 99 percent of the quantity of these products sold, while Canadian

spot sales of these products were *** percent of its sales, the Chinese products were almost 40 percent

spot sales, and nonsubject product was all sold in spot sales, as shown in the following tabulation (in

percent).14 

Type of purchaser Type of sales U.S. Canada China Nonsubject

End users

Contract 94.6 *** 60.4 0.0

Spot 0.3 *** 25.6 7.1

Distributors

Contract 4.4 *** 1.6 0.0

Spot 0.6 *** 12.4 92.9

For long-term contracts, ***, 9 of the 10 responding importers, and 26 of 37 responding

purchasers reported that prices could not be renegotiated during the contract. ***. ***. Purchasers

typically report that the terms for these contracts tended to be either set through negotiations or follow

“industry standards.”

***, 8 importers, and 28 of the responding purchasers reported that long-term contracts fix both

price and quantity. ***, two importers, and 10 purchasers reported that long-term contracts fix price but

not quantity. Two purchasers, but no importers or producers, reported that long-term contracts only fix

quantity. ***.

*** U.S. producers, 8 of 10 responding importers, and 24 of 40 responding purchasers reported

that long-term contracts do not have meet-or-release provisions. ***. Only one purchaser, ***, reported

using its meet-or-release provision.

*** responding U.S. producers and importers reported that the vast majority of their long-term

contracts were with end users. For producer *** of sales. All nine responding importers reported that

their long-term contracts accounted for between 85 and 100 percent of their sales. The most commonly

reported industries purchasing citric acid and certain citrate salts via long-term contracts include: 

beverages (reported by *** producers and eight importers); food (*** producers and eight importers); and

industrial (*** producers and three importers).

Producers and importers that sold on a contract basis were asked if the presence of product or

bids from various sources of supply at the time of contract negotiations was a “very important,”

“somewhat important,” or “not important” factor in price, and if this presence caused prices to increase,

decrease, or not to change (table V-1).
 15 Hearing transcript, pp. 181-182 (Smith).

 16 *** reported that “***.”

 17 *** stated that “***.”

V-6

Table V-1

Citric acid and certain citrate salts: Number of producers and importers reporting the impact of

contract prices from different sources by the importance they place on the presence of product

from these sources

Importance on prices

U.S. producers Importers

Up Neutral Down Up Neutral Down

Presence of U.S. product

 Not important 0 *** *** 0 4 0

 Somewhat important 0 *** *** 1 7 4

 Very important 0 *** *** 2 1 1

Presence of Canadian product

 Not important 0 *** *** 0 8 0

 Somewhat important 0 *** *** 2 3 1

 Very important 0 *** *** 1 1 4

Presence of Chinese product

 Not important 0 *** *** 0 3 0

 Somewhat important 0 *** *** 0 6 3

 Very important 0 *** *** 1 1 6

Presence of nonsubject product

 Not important 0 *** *** 0 11 0

 Somewhat important 0 *** *** 0 4 2

 Very important 0 *** *** 0 1 1

Source: Compiled from data submitted in response to Commission questionnaires.

Purchasers were asked their opinion of the impact on price that the existence of other sellers in

the market has at the time of their contract negotiations (table V-2). Most purchasers reported that the

availability of Chinese and nonsubject product tends to reduce prices, while most reported that the

availability of Canadian product had no impact on price. Purchasers were more divided on the effect of

the availability of U.S. product; the largest number reported that the presence of U.S. product reduces

price. Purchasers who generally reported that multiple sources only reduced price or had no impact

frequently reported that this was because more sources created greater supply or competition-reducing

prices. A number of others reported that Chinese prices were lower than U.S. prices. P&G reported that

U.S. producers offered it lower average delivered prices for citric acid than for product from Canada and

China for every year between 2005 and 2008.15 ***.16 ***.17 ***. 
 18 Long-term contracts have been defined in this industry as contracts of one year or longer.

 19 Cargill continued that losing one or two large contracts early in that season would dramatically increase

pressure on the U.S. producers to make sure that they won subsequent sales. It also said that in such an

environment, non-price factors were not important. Conference transcript, pp. 28-29 (Christiansen).

 20 Some firms reported months that overlapped between quarters; those with months in both the third and fourth

quarters were included in the third quarter, and those with months in both the fourth and first quarters were included

in the first quarter. (This minimizes the number of contracts reported in the fourth quarter.)

 21 Conference transcript, pp. 150-151 (Button and Smith).

 22 Short-term contracts have been defined in this industry as contracts for less than one year.

 23 Of the top four purchasers, only ***.

V-7

Table V-2

Citric acid and certain citrate salts: Number of purchasers reporting the impact on price of the 

presence of other sellers in the market in contract negotiations

Source Increases prices No impact on price Reduces price

U.S. 12 19 23

Canada 4 22 16

Chinese 0 12 40

Nonsubject 0 18 17

Source: Compiled from data in response to Commission questionnaires.

Timing of Long-Term Contracting18

Cargill described U.S. producers as contracting for approximately 80 percent of their output in

November and December of each year. It added that “because we must sell our output to a few large

customers within a very short window, the customers have tremendous negotiating leverage. It is almost

like a reverse auction. At some point, Cargill and other U.S. producers must meet customers’ price

requirements in order to book sufficient orders for the coming production year.”19

When asked when long-term contracts were negotiated, 13 purchasers reported that negotiations

were in the fourth quarter of the preceding year, 3 reported that negotiations were in the third quarter of

the preceding year, 3 reported that negotiations were in the first quarter of the year, 6 reported annual

negotiations, and 3 had other responses.20 The three main reasons purchasers reported for contract

negotiations at the end of each year for the following year included: since the previous year’s corn crop

was in, it was easier to predict the costs of producing citric acid and certain citrate salts for the following

year at this time; this allowed firms to set their price/costs for the following year; and tradition. ***. 

P&G stated that the reason contracting is done at the end of each year is because U.S. producers decided

to do so. P&G continued that it, like other large purchasers, would prefer to have staggered purchases

throughout the year.21 ***. 

Short-Term Contracts22

*** U.S. producers, 15 importers, and 20 purchasers reported using short-term contracts for citric

acid and certain citrate salts.23 JBL reported selling *** percent of the Canadian product using short-term

contracts. Eleven importers of Chinese product reported using short-term contracts, with three of these

reporting that 60 to 100 percent of their sales were made using short-term contracts and eight firms

reporting that 10 to 40 percent of their sales were made using short-term contracts. The duration for
 24 Hearing transcript, p. 179 (Smith).

 25 Conference transcript, p. 153 (Hsu).

 26 Conference transcript, pp. 153 and 176 (Hsu).

V-8

short-term contracts ranged from 1 to 9 months. Sixteen purchasers and 15 importers reported the

duration of their short-term contracts. ***. Twelve importers, including ***, and five purchasers

reported contracts that were 3 months in duration. Thirteen importers and 16 purchasers reported that

short-term contracts fix both price and quantity, one purchaser reported that these contracts fix only price,

and one importer reported that these contracts fix neither price nor quantity. Nine importers and eight

purchasers reported that these contracts did not contain meet-or-release provisions, while six importers

and six purchasers reported that meet-or-release provisions were contained in short-term contracts. Two

importers, ***, and one purchaser, ***, reported invoking meet-or-release provisions. Eight importers

reported that all sales under short-term contracts were purchased by end users, one importer reported that

its short-term contract sales were only to distributors, and the remaining four importers sold from 20 to 98

percent of their short-term contracts to distributors, with the rest to end users. The food and the beverage

industries were the most commonly reported end users purchasing using short-term contracts, mentioned

by five importers each. Purchasers typically reported that these contracts were entered into on an asneeded or quarterly basis. 

Spot Sales/Purchases

*** reported selling some product using spot sales; between 2006 and 2008, the percentages of

spot sales made by ADM, Cargill, and Tate & Lyle were ***, ***, and *** percent, respectively. JBL

reported selling *** of the Canadian product on a spot basis. Six of the 16 importers of Chinese product

reported selling all citric acid and certain citrate salts on a spot basis, four reported that spot sales

accounted for 10 to 40 percent of sales, five reported these were 60 to 80 percent of sales, and one

indicated that spot sales accounted for 85 percent of its total sales. While 47 of the 65 responding

purchasers reported spot purchases between 2006 and 2008, the largest end users were less likely to

purchase citric acid and certain citrate salts on a spot basis. ***. P&G reported using spot purchases only

if an emergency arises.24 Purchasers reported that spot purchases tended to be on an as-needed basis, with

prices reported to be set either by negotiation, the market, or quotes from suppliers.

United Foods stated that smaller customers buy on a spot basis only.25 It added that smaller

customers will buy from distributors that sell citric acid and certain citrate salts along with a pallet of

different products that may influence the price of the citric acid and certain citrate salts as well.26

Producers, importers, and purchasers were asked the importance of citric acid and certain citrate

salts from different sources on their spot prices and if product from different sources tended to cause

prices to increase, decrease, or have a neutral impact (table V-3).

Other Sales/Purchase Conditions

Most responding purchasers, 53 of the 69, did not purchase citric acid and certain citrate salts

together with other products. Some purchasers reported buying mixed truckloads from U.S. producers,

the Canadian producer, or distributors, and one reported buying hundreds of products from the same 
V-9

Table V-3

Citric acid and certain citrate salts: Number of producers, importers, and purchasers reporting the

impact on spot prices of product from different sources by the importance they place on the

presence of product from these sources

Importance on price

U.S. producers Importers Purchasers

Up Neutral Down Up Neutral Down Up Neutral Down

Presence of U.S. product

 Not important *** *** *** 0 4 0 3 13 1

 Somewhat important *** *** *** 3 2 3 10 9 1

 Very important *** *** *** 4 1 1 4 6 3

Presence of Canadian product

 Not important *** *** *** 0 9 0 1 25 2

 Somewhat important *** *** *** 3 0 1 2 14 1

 Very important *** *** *** 1 1 4 1 4 0

Presence of Chinese product

 Not important *** *** *** 0 2 0 0 12 1

 Somewhat important *** *** *** 1 5 1 2 8 7

 Very important *** *** *** 1 3 7 1 4 16

Presence of nonsubject product

 Not important *** *** *** 0 9 1 0 27 0

 Somewhat important *** *** *** 0 4 2 1 12 8

 Very important *** *** *** 0 1 1 1 1 0

Source: Compiled from data in response to Commission questionnaires.

distributor. One purchaser, ***, reported that it would leverage citric acid and certain citrate salts against

corn syrup for better cost. Others reported purchasing citric acid and certain citrate salts with other

products, including: malic acid, ascorbic acid, tartaric acid, fumaric acid, sorbic acid, sodium citrate,

sodium benzoate, sodium hex, sodium gluconate, potassium sorbate, zinc sulfate, manganese sulfate, and

potassium barbate.

Four of 68 responding purchasers reporting using reverse auctions to purchase citric acid and

certain citrate salts: ***. None of the top 17 purchasers reported purchasing citric acid and certain citrate

salts with other products or using reverse auctions. 

Importers who were also distributors and purchasers were asked from which sources they had

received price bids for their spot purchases and which source gave the lowest bids in each of the three

years covered by the investigation. Firms’ responses are in the following tabulation.
 27 Conference transcript, pp. 95 (Oakley) and 146 (Waite).

 28 Hearing transcript, pp. 77-78 (Beroni).

 29 Hearing transcript, pp. 79-80 (Lorusso).

 30 Hearing transcript, p. 81 (Oakley, Anderson).

 31 Hearing transcript, p. 246 (Button).

 32 Hearing transcript, p. 247 (Cameron).

 33 However, at the conference, petitioners clarified that while they do not offer volume-based discounts or rebates,

volume does play a role in price negotiations. Conference transcript, p. 97 (Anderson).

V-10

Source

Importer/distributors Purchasers

Number of

reporting bids

by source

Lowest bid Number of

reporting bids

by source

Lowest bid 

2006 2007 2008 2006 2007 2008

U.S. 2 0 0 0 26 7 6 9

Canada 2 0 0 0 17 4 3 3

China 7(1) 9 9 9 40 36 38 34

Nonsubject 3 0 0 0 15 0 0 0

 1 Two importers did not report the sources of product they purchased, but reported the sources of their lowest

bids. 

Source: Compiled from data in response to Commission questionnaires.

Producers and importers agreed that they learn about competitors’ pricing not through being

shown competing offers directly, but rather from intelligence gathered during the negotiating process with

purchasers.27 Petitioners report that since the price of citric acid is not determined by traders in an open

market they do not know the price at any given time. Customers tell them the price that they want and

“they may be telling us that our prices have to be lower than the prices they’ve actually been given by

other competitors.”28 Pricing information also comes from distributors, particularly if price supports (i.e.,

discounts) are used in order to compete with spot sales.29 Petitioners also report that they are not treated

differently than imports by purchasers.30 Respondents report that spot prices are an indicator of market

trends. When spot prices are higher, as in the citric acid market during this period, this indicates that the

market is tight, and contract negotiations should result in higher prices to reflect this.31 Respondents also

state that spot and contract markets are separate markets and that spot sales do not take business away

from contract sales.32

Sales Terms and Discounts

*** and 22 importers stated that their typical sales terms were net 30 days delivered. Of those 22

importers, nine quoted prices on a delivered basis, nine quoted prices on an f.o.b. warehouse basis, and

four used some combination of delivered and f.o.b. warehouse quotations. Two importers had sales terms

of net 60 days delivered. One additional importer reported “no” sales terms, but stated that it quoted

prices on a delivered basis.

*** reported that they did not have a discount policy, although ***.33 Among importers, six

reported offering discounts, with five of those basing discounts on volume and one basing discounts on
 34 The questionnaire requested data for granular product, and some firms included fine granular which had been a

separate product in the preliminary phase questionnaire. It was unclear how fine granular should be treated in the

final phase questionnaire. Prices were reported to differ between normal granular and fine granular product;

therefore, it was decided to limit products 1 and 2 to exclude fine granular. All firms were contacted and requested

to make any necessary adjustments in their data. All importers that reported any price data for fine granular product

in the preliminary phase of the investigations were checked; some had not included fine granular in their responses

to the final phase questionnaires, and the others either removed fine granular data or reported that they charge the

same price for fine granular as for regular granular. The U.S. producers excluded fine granular from their pricing

data in their responses to the final phase questionnaire.

 35 ***. *** of Canadian product reporting price data ***.

 36 Importers of Chinese product reporting price data were: ***.

V-11

competitive conditions. Nineteen importers reported that they do not offer discounts on their sales of

citric acid and certain citrate salts.

PRICE DATA

The Commission requested U.S. producers and importers of citric acid and certain citrate salts to

provide quarterly data for the total quantity and net f.o.b. value of citric acid and certain citrate salts that

were shipped to unrelated customers in the U.S. market. Data were requested for the period January

2006-December 2008, and values and quantities were requested on an anhydrous-equivalent basis. The

products for which pricing data were requested are as follows:

Product 1.—Citric acid, granular, in dry form in 25-kilogram and 50-pound bags.

Excluding all product packaged and sold as fine granular product.34

Product 2.—Citric acid, granular, in dry form packed in bulk sacks (“supersacks”).

Excluding all product packaged and sold as fine granular product.

Product 3.—Citric acid, in 48 to 52 percent solution form.

Product 4.—Sodium citrate, granular, in dry form in 25-kilogram and 50-pound bags.

Product 5.—Potassium citrate, granular, in dry form in 25-kilogram and 50-pound bags.

Pricing data were requested separately for sales to end users and distributors for all 5 pricing products; in

addition, prices for citric acid products 1 through 3 were requested separately for spot sales and contract

sales.

Three U.S. producers, *** of Canadian product,35 and 21 importers of Chinese product36 provided

usable pricing data for sales of the requested products, although not all firms reported pricing for all

products for all quarters. Pricing data reported by these firms accounted for approximately 56.3 percent

of U.S. producers’ U.S. shipments of citric acid and certain citrate salts, *** percent of U.S. shipments of

subject imports from Canada, and 60.0 percent of U.S. shipments of subject imports from China in 2008. 

Price Trends and Comparisons

Producers’ and importers’ pricing data by sales to end users vs. distributors and by spot sales vs.

contract sales are presented in tables V-4 to V-8 and figures V-3 to V-7. A summary of pricing data is 
V-12

Table V-4

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 1,1

 and margins of (overselling)/underselling by spot and contract sales, by

type of purchaser and by quarters, January 2006-December 2008

Period

United States Canada China

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Spot sales to end users

2006:

 Jan.-Mar. $*** *** $*** *** *** $0.54 4,803 ***

 Apr.-June *** *** *** *** *** 0.54 5,324 ***

 July-Sept. *** *** *** *** *** 0.53 4,731 ***

 Oct.-Dec. *** *** *** *** *** 0.57 3,304 ***

2007:

 Jan.-Mar. *** *** *** *** *** 0.54 4,411 ***

 Apr.-June *** *** *** *** *** 0.55 4,653 ***

 July-Sept. *** *** *** *** *** 0.53 4,845 ***

 Oct.-Dec. *** *** *** *** *** 0.56 4,260 ***

2008:

 Jan.-Mar. *** *** *** *** *** 0.59 6,421 ***

 Apr.-June *** *** *** *** *** 0.69 8,004 ***

 July-Sept. *** *** *** *** *** 0.86 6,590 ***

 Oct.-Dec. *** *** *** *** *** 0.99 4,580 ***

Contract sales to end users

2006:

 Jan.-Mar. *** *** *** *** *** 0.52 3,868 ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** *** *** ***

2007:

 Jan.-Mar. *** *** *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** *** *** ***

2008:

 Jan.-Mar. *** *** *** *** *** 0.57 5,955 ***

 Apr.-June 0.55 13,428 *** *** *** 0.66 7,332 (18.8)

 July-Sept. 0.54 11,299 *** *** *** 0.77 5,362 (42.7)

 Oct.-Dec. 0.56 8,107 *** *** *** 0.83 4,075 (46.2)

 1 Citric acid, granular, in dry form in 25-kilogram and 50-pound bags sold.

Table continued on next page.
V-13

Table V-4--Continued

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 1,1

 and margins of (overselling)/underselling by spot and contract sales, by

type of purchaser and by quarters, January 2006-December 2008

Period

United States Canada China

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Spot sales to distributors

2006:

 Jan.-Mar. $*** *** $*** *** *** $0.48 1,544 ***

 Apr.-June *** *** *** *** *** 0.48 1,820 ***

 July-Sept. *** *** *** *** *** 0.48 2,086 ***

 Oct.-Dec. *** *** *** *** *** 0.48 1,963 ***

2007:

 Jan.-Mar. *** *** *** *** *** 0.48 2,768 ***

 Apr.-June *** *** *** *** *** 0.49 2,494 ***

 July-Sept. *** *** *** *** *** 0.50 2,687 ***

 Oct.-Dec. *** *** *** *** *** 0.52 1,718 ***

2008:

 Jan.-Mar. *** *** *** *** *** 0.57 2,469 ***

 Apr.-June *** *** *** *** *** 0.65 4,850 ***

 July-Sept. *** *** *** *** *** 0.76 3,934 ***

 Oct.-Dec. *** *** *** *** *** 0.80 2,452 ***

Contract sales to distributors

2006:

 Jan.-Mar. *** *** *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** - 0 - *** *** ***

2007:

 Jan.-Mar. 0.50 1,373 *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** - - -

 July-Sept. 0.48 2,548 *** *** *** - - -

 Oct.-Dec. 0.49 2,278 *** *** *** - - -

2008:

 Jan.-Mar. *** *** *** *** *** - - -

 Apr.-June 0.59 2,882 *** *** *** - - -

 July-Sept. 0.60 2,554 *** *** *** - - -

 Oct.-Dec. 0.60 2,338 *** *** *** - - -

 1 Citric acid, granular, in dry form in 25-kilogram and 50-pound bags sold.

Source: Compiled from data submitted in response to Commission questionnaires.
V-14

Table V-5

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 2,1

 and margins of (overselling)/underselling by spot and contract sales, by

type of purchaser and by quarters, January 2006-December 2008

Period

United States Canada China

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Price

(per

pound)

Quantity

(1,000 dry

pounds)

Margin

(percent)

Spot sales to end users

2006:

 Jan.-Mar. $*** *** $*** *** *** $*** *** ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** - 0 - *** *** ***

 Oct.-Dec. *** *** *** *** *** *** *** ***

2007:

 Jan.-Mar. *** *** *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** - 0 - *** *** ***

2008:

 Jan.-Mar. *** *** *** *** *** 0.56 499 ***

 Apr.-June *** *** - 0 - 0.61 429 ***

 July-Sept. *** *** - 0 - *** *** ***

 Oct.-Dec. *** *** *** *** *** *** *** ***

Contract sales to end users

2006:

 Jan.-Mar. 0.47 6,468 *** *** *** *** *** ***

 Apr.-June 0.47 13,539 *** *** *** *** *** ***

 July-Sept. 0.47 14,961 *** *** *** 0.39 9,280 16.1

 Oct.-Dec. 0.48 5,950 *** *** *** 0.39 5,392 17.5

2007:

 Jan.-Mar. 0.47 10,010 *** *** *** *** *** ***

 Apr.-June 0.47 14,264 *** *** *** *** *** ***

 July-Sept. 0.47 11,213 *** *** *** *** *** ***

 Oct.-Dec. 0.47 11,015 *** *** *** *** *** ***

2008:

 Jan.-Mar. 0.52 9,218 *** *** *** *** *** ***

 Apr.-June 0.53 13,602 *** *** *** *** *** ***

 July-Sept. 0.54 12,679 *** *** *** 0.71 22,659 (31.0)

 Oct.-Dec. 0.53 11,803 *** *** *** *** *** ***

 1 Citric acid, granular, in dry form packed in bulk sacks ("supersacks").

Source: Compiled from data submitted in response to Commission questionnaires.
V-15

Table V-6

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 3,1

 and margins of (overselling)/underselling by spot and contract sales, by

type of purchaser and by quarters, January 2006-December 2008

Period

United States Canada

Price

(per pound)

Quantity

(dry 1,000

pounds)

Price

(per pound)

Quantity

(dry 1,000

pounds) Margin (percent)

Spot sales to end users

2006:

 Jan.-Mar. $*** *** $*** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** *** *** ***

2007:

 Jan.-Mar. *** *** *** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** *** *** ***

2008:

 Jan.-Mar. *** *** *** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** - *** -

 Oct.-Dec. *** *** - *** -

Contract sales to end users

2006:

 Jan.-Mar. 0.44 30,423 *** *** ***

 Apr.-June 0.43 27,241 *** *** ***

 July-Sept. 0.46 26,420 *** *** ***

 Oct.-Dec. 0.44 25,294 *** *** ***

2007:

 Jan.-Mar. 0.44 29,794 *** *** ***

 Apr.-June 0.45 30,318 *** *** ***

 July-Sept. 0.44 31,704 *** *** ***

 Oct.-Dec. 0.44 29,358 *** *** ***

2008:

 Jan.-Mar. 0.51 23,582 *** *** ***

 Apr.-June 0.53 23,754 *** *** ***

 July-Sept. 0.53 21,562 *** *** ***

 Oct.-Dec. 0.53 20,069 *** *** ***

 1 Citric acid, in 48 to 52 percent solution form.

Source: Compiled from data submitted in response to Commission questionnaires.
V-16

Table V-7

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 4,1

 and margins of (overselling)/underselling by type of purchaser and by

quarters, January 2006-December 2008

Period

United States China

Price

(per pound)

Quantity

(1,000 dry

pounds)

Price

(per pound)

Quantity

(1,000 dry

pounds) Margin (percent)

Sales to end users

2006:

 Jan.-Mar. $*** *** $0.50 1,238 ***

 Apr.-June *** *** 0.50 1,545 ***

 July-Sept. *** *** 0.51 1,482 ***

 Oct.-Dec. *** *** 0.50 1,145 ***

2007:

 Jan.-Mar. *** *** 0.50 1,508 ***

 Apr.-June *** *** 0.50 1,804 ***

 July-Sept. *** *** 0.51 1,547 ***

 Oct.-Dec. *** *** 0.50 1,263 ***

2008:

 Jan.-Mar. *** *** 0.56 1,470 ***

 Apr.-June *** *** 0.62 1,956 ***

 July-Sept. *** *** 0.75 1,707 ***

 Oct.-Dec. *** *** 0.80 1,839 ***

Sales to distributors

2006:

 Jan.-Mar. *** *** 0.42 149 ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** 0.45 110 ***

 Oct.-Dec. *** *** *** *** ***

2007:

 Jan.-Mar. *** *** 0.46 168 ***

 Apr.-June *** *** 0.41 249 ***

 July-Sept. *** *** 0.42 563 ***

 Oct.-Dec. *** *** 0.42 309 ***

2008:

 Jan.-Mar. *** *** 0.51 480 ***

 Apr.-June *** *** 0.60 1,085 ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** 0.78 292 ***

 1 Sodium citrate, granular, in dry form in 25-kilogram and 50-pound bags.

Source: Compiled from data submitted in response to Commission questionnaires.
V-17

Table V-8

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities of domestic

and imported product 5, and margins of (overselling)/underselling by type of purchaser and by

quarters, January 2006-December 2008

*******

Figure V-3

Citric acid: Weighted-average delivered selling prices to distributors and end users via spot and

contract sales, as reported by U.S. producers and importers of product 1, by quarters, January

2006-December 2008

*******

Figure V-4

Citric acid: Weighted-average delivered selling prices to distributors and end users via spot and

contract sales, as reported by U.S. producers and importers of product 2, by quarters, January

2006-December 2008

*******

Figure V-5

Citric acid: Weighted-average delivered. selling prices to distributors and end users via spot and

contract sales, as reported by U.S. producers and importers of product 3, by quarters, January

2006-December 2008

*******

Figure V-6

Citric acid: Weighted-average delivered selling prices to distributors and end users, as reported

by U.S. producers and importers of product 4, by quarters, January 2006-December 2008

*******

Figure V-7

Citric acid: Weighted-average delivered. selling prices to distributors and end users, as reported

by U.S. producers and importers of product 5, by quarters, January 2006-December 2008

*******
 37 ***.

 38 Staff telephone interview with ***.

 39 ***.

 40 ***.

V-18

provided in table V-9, and information regarding underselling and overselling of citric acid products is

presented in table V-10. 

Table V-9

Citric acid and certain citrate salts: Summary of weighted-average delivered prices for products 1-

5, by country, type of purchaser, and by spot vs. contract sales (for products 1-3), January 2006-

December 2008

*******

Table V-10

Citric acid and certain citrate salts: Instances of underselling/(overselling) and the range and

average of margins for products 1-5, January 2006-December 2008

Country

Underselling

Import sales 2006-08

(pounds)

Number of

instances

Simple average

(percent) Range (percent)

Underselling

Canada *** 71 10.7 0.0-29.5

China 160,325 68 14.7 0.4-31.7

 Total1 *** 139 12.7 0.0-31.7

Overselling

Canada *** 41 (7.3) (0.4)-(55.7)

China 136,852 51 (21.1) (0.9)-(54.3)

 Total1 *** 92 (15.0) (0.4)-(55.7)

 1 Total number of instances for all cited products and average and range of margins for all cited products. 

Source: Compiled from data submitted in response to Commission questionnaires.

Products 1, 2, and 3 consist of citric acid. *** sold *** three products.37 Sixteen Chinese

importers provided data for product 1, and nine for product 2. Product 3, citric acid in solution, was not

imported from China, but importer *** reported making and selling citric acid in solution from Chinese

granular citric acid. Product 4 is a sodium citrate product sold by ***. Eleven Chinese importers

provided data for product 4. Product 5 is a potassium citrate product sold by ***. Five importers from

China provided data for product 5. The price of product 5, potassium citrate, was reported to increase in

2008 because of shortages of potassium due to a strike at a potassium mine.38

***.39 ***.40

For product 1, Canadian product undersold the U.S. product for nearly all spot sales while

overselling occurred for most contract sales, and Chinese product mainly undersold for all combinations

except contract sales to end users, the category in which there was the largest volume of both U.S. and

Chinese sales. For product 2, Chinese product mainly undersold for all combinations, and Canadian
 41 Purchasers reporting U.S. product pricing information were: ***. Purchasers reporting Canadian product price

data were: ***. Purchasers reporting Chinese product price data were: ***. The only purchaser reporting

nonsubject product price data was ***. Pricing data reported by these firms accounted for approximately 36.3

percent of U.S. producers' U.S. shipments of citric acid and certain citrate salts, 44.5 percent of U.S. shipments of

subject imports from Canada, and 30.6 percent of U.S. shipments of subject imports from China in 2008.

 42 No new allegations were reported in the final phase questionnaires. The allegations included in this report

differ slightly from those included in the preliminary phase staff report, since allegations from 2004 are not included,

nor are two lost sales allegations for purchasers located in Canada. 

V-19

product undersold for nearly all spot sales to end users and distributors but oversold half the time for

contract sales to end users. For product 3, Canadian product mainly undersold for spot sales to end users

and distributors, and mainly oversold for contract sales to end users, the category for which there was the

most U.S. ***. *** Canadian data were reported for products 2 or 3, contract sales to distributors. For

products 4 and 5, Chinese product oversold the domestic product in all sales to end users, which are the

categories with the most U.S. and Chinese sales. Domestically produced product 4 sold to distributors

was mainly undersold by the Chinese product and domestically produced product 5 sold to distributors

was undersold half the time by the Chinese product.

In addition, purchasers that purchased over 20 million pounds of citric acid and certain citrate

salts were requested to provide purchase price data for the five listed products. Pricing was requested for

purchases pursuant to contracts and spot purchases for products 1-3; prices for products 4 and 5 combined

contract and spot purchases. Eight purchasers provided pricing data for U.S. product, four for Canadian

product, six for Chinese product, and one for nonsubject product.41 For product 1, both spot and contract

purchase prices were available. Canadian prices were below U.S. prices in 22 of the 23 price

comparisons and Chinese prices were below U.S. prices in 14 of the 15 price comparisons. For product 2

contract purchases, Canadian prices were below U.S. prices in 3 of the 12 price comparisons and Chinese

prices were below U.S. prices in 10 of the 12 price comparisons. For product 3 contract purchases,

Canadian prices were above U.S. prices for all 12 quarters. Chinese prices were below U.S. prices in 7 of

the 10 price comparisons for product 4 and all price comparisons for product 5.

LOST SALES AND LOST REVENUES

The Commission requested U.S. producers of citric acid and certain citrate salts to report any

instances of lost sales or revenues they experienced due to competition from imports of citric acid and

certain citrate salts from Canada or China during January 2005 to March 2008. All three U.S. producers

reported that they had to either reduce prices or roll back announced price increases. The 60 lost sales

allegations42 totaled $*** and involved *** pounds of citric acid; the 27 lost revenue allegations totaled

$*** and involved *** pounds of citric acid. Staff contacted the listed purchasers, and 36 purchasers,

covering 51 allegations, responded. A summary of the information obtained follows in tables V-11 and

V-12 and the text descriptions below.

*******

Table V-11

Citric acid and certain citrate salts: U.S. producers’ lost sales allegations

*******
 43 ***. 

 44 ***.

V-20

Table V-12

Citric acid and certain citrate salts: U.S. producers’ lost revenue allegations

* * * * * * * 

* * * * * * *.43 44
 1

 These related party transfers are to *** foreign affiliates. Since the trade (shipment) section of the U.S.

producer questionnaire instructs producers to report *** shipments, *** are properly classified as *** and not *** in

Part III.

 2

 February 24, 2009 e-mail from ***.

 3

 February 25, 2009 e-mail from ***.

 4

 Commission staff conducted a verification of ADM’s questionnaire response on March 31-April 2, 2009.

 5

 Petitioners contended that the increase in profitability was the result of a decrease in imports from China which

was in turn the result of a European Union antidumping investigation and the filing of the U.S. cases (hearing 

transcript, pp. 15 (Ellis) and 44-45 (Christiansen)).

VI-1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

All three U.S. producers provided useable financial data. ADM’s fiscal year ends on June 30 and 

Cargill’s fiscal year ends on May 31, while Tate & Lyle’s fiscal year ends on March 31. However, the

financial data of all three producers were submitted on a calendar-year basis. Consistent with the

presentation in other parts of this report, the only data presented in this section are the producers’

combined operations on citric acid and certain citrate salts; separate data on citric acid, sodium citrate, 

and potassium citrate are presented in appendix C.

In addition to commercial sales, *** reported transfers to related parties, and *** reported

internal consumption. These transfers and internal consumption1

 accounted for approximately ***

percent and *** percent, respectively, of the industry’s 2008 sales values. The unit sales values of ***2

***. The unit sales values of ***3 ***.

The questionnaire data of ADM were verified with company records at its plant facilities.4

 All

verification adjustments were incorporated into this report. The financial data of ADM were revised for

all periods to ***. The revisions resulted in ***. A part of non-recurring charges related to ***.

OPERATIONS ON CITRIC ACID AND CERTAIN CITRATE SALTS

Aggregate income-and-loss data for the producers on their total operations producing/selling 

citric acid and certain citrate salts are presented in table VI-1. Despite increases in net sales quantities and

values from period to period, the domestic industry incurred much greater losses in 2007 than in 2006. 

From 2007 to 2008, net sales value and per-unit sales values increased by approximately 20 percent while

sales quantities were relatively unchanged. Even though profitability at the gross and operating profit

levels improved, the gross profit margin was 2.1 percent and there were still losses at the operating

income level. The decrease in the operating loss between 2007 and 2008 resulted from the $0.085 per

pound increase in unit sales values, which was $0.027 per pound higher than the $0.058 per pound

increase in unit total costs – the unit cost of goods sold (“COGS”) increased by $0.058 per pound (led by

the increase of raw material costs) while unit selling, general and administrative (“SG&A”) expenses

decreased by $0.001 per pound, for a net total cost (COGS and SG&A expenses combined) increase of

$0.058 per pound.5
 6

 *** based on the Statement of Financial Accounting Standards (SFAS) No. 143, “Accounting for assets

retirement obligations” (February 24, 2009 e-mail from ***). The statement applies to legal obligations associated

with the retirement of long-lived assets that result from the acquisition, construction, development and (or) the

normal operation of a long-lived asset. This statement requires that the fair value of a liability for an asset retirement

obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. 

Since financial data should be based on the U.S. domestic production and sales operations only, ***. 

 7

 ***.

 8

 ***. Refer to the e-mail from ***. Restructuring charges and impairment losses on long-lived assets to be held

and used shall be reported as components of income from continuing operations, according to GAAP (Statement of

Financial Accounting Standards (SFAS) No. 144, “Accounting for the impairment or disposal of long-lived assets”),

with appropriate footnote disclosure. 

 9 See table III-2.

 10 See page II-1, ***.

VI-2

In addition, *** producers reported *** amounts of other expenses; ***;6

 ***;7 and ***.8 These

expenses were reported below the operating income (loss) line as other expenses.

Selected company-by-company data are presented in table VI-2. ***, the ***, reported increased

sales quantities and values and *** in every period. While ***. *** reported capacity utilization rates

(approximately *** percent in 2006 and 2007 and *** percent in 2008) were ***,9

 and this may also

contribute to ***. While *** also generally had the ***, the disparity between ***. ***’s quantity and

value of net sales increased in both 2007 and 2008. ***, on the other hand, reported decreased sales

quantities and values from 2006 to 2007, and then increased sales quantities and values from 2007 to

2008. Its unit revenues and unit costs were generally ***. The company reported ***. ***10 ***.
VI-3

Table VI-1

Citric acid and certain citrate salts: Results of U.S. producers1

 on their operations, calendar years

2006-2008

Item Calendar year

2006 2007 2008

Quantity (1,000 pounds)

Net sales quantities:

 Commercial sales *** *** ***

 Internal consumption *** *** ***

 Transfers to related firms *** *** ***

 Total net sales quantities 466,160 513,924 515,514

Value (1,000 dollars)

Net sales values:

 Commercial sales *** *** ***

 Internal consumption *** *** ***

 Transfers to related firms *** *** ***

 Total net sales values 205,773 226,909 271,708

Cost of goods sold (COGS) 202,849 235,123 266,120

Gross profit (loss) 2,924 (8,214) 5,588

SG&A expenses 13,653 13,420 13,093

Operating income (loss) (10,729) (21,634) (7,505)

 Interest expense 6,981 6,692 5,253

 All other expenses1 2,599 198 40,432

 All other income 1,745 2,469 0

Net income (loss) (18,564) (26,055) (53,190)

Depreciation/amortization 15,468 14,137 11,522

Cash flow (3,096) (11,918) (41,668)

Unit value (per pound)

Net sales values $0.441 $0.442 $0.527

COGS 0.435 0.458 0.516

Gross profit (loss) 0.006 (0.016) 0.011

SG&A expenses 0.029 0.026 0.025

Operating income (loss) (0.023) (0.042) (0.015)

Table continued on next page.
VI-4

Table VI-1--Continued 

Citric acid and certain citrate salts: Results of U.S. producers1

 on their operations, calendar years

2006-2008

Item Calendar year

2006 2007 2008

Ratio to net sales (percent)

COGS 98.6 103.6 97.9

Gross profit (loss) 1.4 (3.6) 2.1

SG&A expenses 6.6 5.9 4.8

Operating income (loss) (5.2) (9.5) (2.8)

Number of firms reporting

Operating losses *** *** ***

Data 3 3 3

 1 The large other expenses in 2008 are attributable to ***.

Source: Compiled from data submitted in response to Commission questionnaires.

Table VI-2

Citric acid and certain citrate salts: Selected financial data of producers on their operations,

calendar years 2006-2008

* * * * * * *
 11 February 24, 2009 e-mail from ***.

 12 Statement of Financial Accounting Standards No. 161 (FAS-161, Disclosures about Derivative Instruments and

Hedging Activities; an amendment of FASB No. 133) changes the disclosure requirements for derivative instruments

and hedging activities. This Statement has the same scope as Statement 133. It requires that the location and fair

value amounts of derivative instruments be reported in the statement of financial position and the location and

amount of the gains and losses be reported in the statement of financial performance. Fair value amounts and the

effective portion of gains and losses shall be presented separately by type of derivative contract and the disclosure

shall identify the line item(s) in both statements. Financial Accounting Standard (FAS-133, Accounting for

Derivative Instruments and Hedging Activities) states that if inventory has been the hedged item in a fair value

hedge, the inventory’s cost basis used in determining the lower-of-cost-or-market shall include the effects of

adjusting its carrying amount as a result of recording the gain or loss on the hedged item. According to ADM’s

notes to consolidated financial statements, Note 1, summary of significant accounting policies, ADM will be

required to adopt FAS-161 on January 1, 2009. It further states that the adoption of this standard will require

expanded disclosure in the notes to the company’s consolidated financial statements but will not affect financial

results.

 13 Mark-to-market or fair value accounting refers to the accounting standards (FAS-157, Fair Value

Measurements) of assigning a value to a position held in a financial instrument based on the current fair market price

for the instrument or similar instruments.

 14 ***. FASB No. 161 (Disclosures about Derivative Instruments and Hedging Activities; an amendment of

FASB No. 133) requires that the location and fair value amounts of derivative instruments be reported in the

statement of financial position and that the location and amount of the gains and losses be reported in the statement

of financial performance. Fair value amounts and the effective portion of gains and losses shall be presented

separately by type of derivative contract and the disclosure shall identify the line item(s) in both statements. The

effective portion of gains or loss is recorded as part of cost of sales and the ineffective portion of gains or loss is

recorded as part of other income or expenses. 

 15 Petitioners noted several times at the staff conference that theirs was a capital-intensive industry with high

fixed costs. Conference transcript, pp. 22-23 (Oakley); pp. 34-35 and 37 (Poulos); and, p. 41 (Anderson). While

there is no exact definition of a capital-intensive or a high fixed cost industry, staff notes that other factory costs

(generally considered fixed costs) accounted for approximately 50 percent of the domestic industry’s total cost of

goods sold from 2006 through 2007 while they decreased to 44 percent in 2008.

 16 The U.S. producers incurred a net cost (the excess of disposal costs over revenues earned) of $*** in 2007

($*** per pound) to dispose of the byproducts of their citric acid production. Petitioners’ postconference brief,

exhibit 1, pp. 16-17. This cost was reported in other factory costs.

VI-5

***.11 ***. Cargill and Tate & Lyle also experienced ***. Unlike ***, the bulk of their ***. 

On a per-unit basis, ***.

All three producers use futures contracts to hedge against changes in the price of corn. Even

though the questionnaire responses of the three producers seemed to indicate that they accounted for 

gains or losses associated with these contracts differently, upon further inquiry by staff, the three 

producers all accounted for them eventually in the same manner - any gains or losses attributable to corn

consumed were included in raw material costs as actual costs, and any gains or losses attributable to any

open futures positions were reported as other income or expenses.12 Cargill books ***13***.14 

Per-pound cost data of the producers on their operations, i.e., COGS and SG&A expenses, are 

presented in table VI-3. As shown in this table, the increase in unit COGS was entirely driven by 

increases in raw material costs, as the direct labor cost decreased slightly while factory overhead 

increased slightly. Factory overhead, the single largest operating cost component for 2006 and 2007,15 16
 17 February 24, 2009 e-mail from ***.

VI-6

consists of many different costs, such as energy, depreciation, general maintenance, repairs, insurance, 

and property taxes. Petitioners noted that their energy costs in particular have increased.17 While the 

ratio of total COGS to net sales increased from 98.6 percent in 2006 to 103.6 percent in 2007, it 

decreased back to 97.9 percent in 2008.

Table VI-3

Citric acid and certain citrate salts: Selected financial data of producers on their operations,

calendar years 2006-2008

Item

Calendar year

2006 2007 2008

COGS: Value (per pound)

 Raw materials $0.182 $0.205 $0.263

 Direct labor 0.033 0.029 0.028

 Factory overhead 0.221 0.223 0.225

 Total COGS 0.435 0.458 0.516

SG&A expenses 0.029 0.026 0.025

 Total cost 0.464 0.484 0.542

Source: Compiled from data submitted in response to Commission questionnaires. 

The variance analysis showing the effects of prices and volume on the producers’ revenues, and

of expenses, costs, and volume on their total cost, is shown in table VI-4. The analysis illustrates that

from 2006 to 2008 the decrease in losses resulted from a positive price variance ($44.1 million; unit

revenues increased), in spite of a negative cost/expense variance (negative $39.8 million; unit total costs

increased). 
VI-7

Table VI-4

Citric acid and certain citrate salts: Variance analysis of U.S. producers’ operations, calendar

years 2006-2008

Item

Between calendar years

2006-2008 2006-07 2007-08

Value ($1,000)

Net sales:

 Price variance 44,149 52 44,097

 Volume variance 21,786 21,084 702

 Total net sales variance 65,935 21,136 44,799

Cost of goods sold:

 Cost variance (41,795) (11,490) (30,270)

 Volume variance (21,476) (20,784) (727)

 Total COGS variance (63,271) (32,274) (30,997)

Gross profit variance 2,664 (11,138) 13,802

SG&A expense:

 Expense variance 2,005 1,632 369

 Volume variance (1,445) (1,399) (42)

 Total SG&A variance 560 233 327

Operating income variance 3,224 (10,905) 14,129

Summarized as:

 Price variance 44,149 52 44,097

 Net cost/expense variance (39,789) (9,858) (29,901)

 Volume variance (1,136) (1,099) (67)

Source: Compiled from data submitted in response to Commission questionnaires.
 18 ***. 

VI-8

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Domestic citric acid producers’ capital expenditures and research and development (R&D)

expenses are presented in table VI-5. The overall level of expenditures was generally low, being less than

depreciation expenses (table VI-1) in every period. This is an indication that the domestic industry is not

expanding or improving its productive facilities, but is at best maintaining them.

*** R&D expenses, the overall level was low. 

Table VI-5

Citric acid and certain citrate salts: U.S. producers’ capital expenditures and research and

development (R&D) expenses, calendar years 2006-2008

Item Calendar year

2006 2007 2008

Value (1,000 dollars)

Capital expenditures:

 ADM1 *** *** ***

 Cargill2 *** *** ***

 Tate & Lyle3 *** *** ***

 Total 6,534 7,746 5,537

R&D expenses:

 ADM *** *** ***

 Cargill *** *** ***

 Tate & Lyle *** *** ***

 Total 1,701 1,473 1,919

 1 ADM reported the following: ***.

 2 Expenditures cover ***. 

 3

 ***. 

Source: Compiled from data submitted in response to Commission questionnaires.

ASSETS AND RETURN ON INVESTMENT

Data on the domestic citric acid and certain citrate salts producers’ assets and their return on

investment (defined as operating income divided by total assets) are presented in table VI-6. The value of

total assets decreased *** in 2008 as ***.18 The return on investment approximated the operating income

margins in table VI-1.
VI-9

Table VI-6

Citric acid and certain citrate salts: U.S. producers’ assets and return on assets, calendar years

2006-2008

Item Calendar year

2006 2007 2008

Value of assets Value (1,000 dollars)

 Current assets:

 Cash 0 0 0

 Accounts receivable (net) 22,034 25,635 32,987

 Inventories (total) 51,891 35,376 50,008

 All other current assets 4,670 1,390 457

 Total current assets 78,595 62,401 83,452

 Non-current assets:

 Property, plant, and equipment (PPE) at cost 547,426 554,625 553,394

 Net book value of PPE 115,601 109,386 77,909

 Other non-current assets 0 0 0

 Total non-current assets 115,601 109,386 77,909

 Total assets 194,196 171,787 161,361

Value (1,000 dollars)

Operating income (10,729) (21,634) (7,505)

Ratio of operating income to total assets (percent)

Return on investment (5.5) (12.6) (4.7)

Source: Compiled from data submitted in response to Commission questionnaires.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual negative effects since January

1, 2006, on their return on investment, growth, investment, ability to raise capital, existing development

and production efforts (including efforts to develop a derivative or more advanced version of the

product), or the scale of capital investments as a result of imports of citric acid and certain citrate salts

from Canada or China. Their responses are as follows:

ADM ***.

Cargill ***.

Tate & Lyle ***.

The Commission also requested U.S. producers to describe any anticipated negative impact of

imports of citric acid and certain citrate salts from Canada or China. Their responses are as follows:

ADM ***.
VI-10

Cargill ***.

Tate & Lyle ***.
 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

PRODUCERS IN NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that--

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the

foreign country, which can be used to produce the subject merchandise,

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission
 2

 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material

injury to the domestic industry.”

 3

 JBL Canada’s foreign producer’s questionnaire, p. 6.

VII-2

under section 705(b)(1) or 735(b)(1) with respect to either the raw

agricultural product or the processed agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the countervailable subsidies was presented in Part I of this report;

information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and

V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing

development and production efforts is presented in Part VI. Information on inventories of the subject

merchandise; foreign producers’ operations, including the potential for “product-shifting;” any other

threat indicators, if applicable; and any dumping in third-country markets, follows. Also presented in this

section of the report is information obtained for consideration by the Commission on nonsubject-country

producers.

THE INDUSTRY IN CANADA

The Commission requested and received data from one firm, Jungbunzlauer Technology GmbH

& Co. KG (“JBL Canada”), which was listed in the petition and accounted for all citric acid production in

Canada during the period of investigation. JBL Canada does not produce sodium citrate, potassium

citrate, or crude calcium citrate at its production facility in Canada. JBL Canada is wholly owned by the

Swiss firm, Jungbunzlauer AG.

During the 2000 investigation, U.S. imports from nonsubject countries included imports from

Jungbunzlauer Austria AG’s citric acid production facility in Vienna, Austria. In 1999, JBL began

planning to build a citric acid production facility in North America to better supply that geographical

market. In 2002, JBL Canada’s production facility began production of food and beverage grade citric

acid. 

During the period for which data were collected in these investigations, JBL Canada reported that

*** percent of its total sales in the most recent fiscal year were sales of citric acid. In 2008, *** percent

of JBL Canada’s total shipments of citric acid were exported to the United States, *** percent of its

shipments were to its home market, and *** percent of its shipments were exported to other countries,

principally to ***. JBL Canada reported a ***-percent increase in capacity from 2007 to 2008 ***. It

has stated that it ***.3

 JBL Canada’s production increased by *** percent between 2006 and 2008, and is

projected to *** in 2009 and 2010. JBL Canada reported that it acted as its exclusive U.S. importer of
 4

 Foreign producer questionnaires were sent to counsel for the Chinese respondents. Two firms in China (***)

reported that they did not export to the United States from China citric acid or certain citrate salts during the period

of investigation. ***.

 5

 Export shipments to the United States reported by responding Chinese producers accounted for 88.2 percent of

U.S. imports in 2008 (based on Commerce statistics). According to ***. 

 6

 Chinese respondents stated that there has been rapid consolidation of Chinese citric acid producers; and since

2002, the number of major producers of citric acid in China has fallen from over 100 to below 20. They claim that

the driving force behind this consolidation is the government of China’s new environmental protection policies,

which forced the closure of many obsolete citric acid manufacturing facilities and may slow or prevent the addition

of more capacity. In 2008, pursuant to these environmental regulations, the Chinese government approved 15

Chinese producers of citric acid to export the product. Chinese respondents’ prehearing brief, pp. 70-71; Chinese

respondents’ posthearing brief, app. A, p. 39.

 7

 According to ***. See Petitioners’ postconference brief, exh. 32, p. 1.

 8

 *** of the 14 responding Chinese producers (and *** out of the largest 5 producers), ***, reported increases in

capacity during the period of investigation. *** accounted for *** percent of the increase in capacity from 2006 to

2008. Chinese respondents’ posthearing brief, p. 10 fn. 5 (observing that ***). 

 9

 Chinese respondents stated that in November 2008, because of violations of Chinese environmental regulations,

*** lost its right to export citric acid. *** reported in its questionnaire that its projected 2009 exports to the United

States would *** dry pounds. Chinese respondents’ prehearing brief, pp. 74-75. *** observe that *** is currently

(continued...)

VII-3

record of citric acid ***. Table VII-1 presents data for reported production and shipments of citric acid

for JBL Canada. 

Table VII-1

Citric acid and certain citrate salts: Canada’s reported production capacity, production,

shipments, and inventories, 2006-2008 and projections for 2009 and 2010

* * * * * * *

THE INDUSTRY IN CHINA

The Commission received 16 responses from foreign producers or exporters of citric acid and

certain citrate salts in China.4

 Data regarding the Chinese industry are based on 14 foreign producer

questionnaires, which are believed to account for approximately 90 percent of Chinese export shipments

to the United States in 2008.5

 The largest five reporting Chinese producers accounted for the vast

majority of reported 2008 production.6

 These companies are: ***. Table VII-2 presents separately the

capacity, production, capacity utilization, export shipments to the United States, and shares of reported

production and exports of the 14 responding Chinese producers in 2008.

Table VII-2

Citric acid and certain citrate salts: China’s reported production capacity, production, shipments,

and inventories, 2008

* * * * * * *

Table VII-3 presents data for capacity, production, and shipments of citric acid and certain citrate

salts from all reporting producers in China. Chinese producers’ capacity increased by 41.9 percent from

2006 to 2008.7 8

 Capacity is projected to increase further by 7.1 percent from 2008 to 2009 and remain

virtually steady in 2010.9

 The production10 of Chinese producers increased by 45.0 percent from 2006 to
 9

 (...continued)

soliciting overseas sales via public websites. ***. 

Chinese respondents also stated that DSM Citric Acid (Wuxi), Ltd. (“DSM”) discontinued citric acid

production in the first quarter of 2009 after the Chinese government requested that the production facility be moved

to accommodate future urban development. DSM’s capacity is approximately 50,000 metric tons (110.2 million dry

pounds). Chinese respondents’ prehearing brief, p. 73. Counsel for Chinese respondents do not represent DSM. 

The Commission did not receive a questionnaire response from DSM.

 10 *** of the responding Chinese producers reported that they produced products other than citric acid or certain

citrate salts on the same manufacturing equipment.

 11 Chinese respondents project that exports to the United States in 2009 and 2010 will decrease dramatically as

Chinese firms ship product to other markets, especially the European Union. Chinese respondents’ posthearing

brief, p. 36.

VII-4

2008, and is projected to decrease by 1.5 percent from 2008 to 2009 before rebounding slightly in 2010. 

Chinese producers reported capacity utilization rates ranging from 86.4 percent in 2006 to 89.0 percent in

2007.

 During the period of investigation, the volume of Chinese producers’ export shipments to the

United States increased by 20.4 percent from 2006 to 2008, but decreased as a share of China’s total

shipments from 11.2 percent in 2006 to 10.0 percent in 2008.11 Meanwhile, the volume of Chinese

producers’ shipments to the Chinese home market (including internal consumption) increased by 47.6

percent from 2006 to 2008 and increased as a share of total shipments during the period from 26.2 percent

of total shipments in 2006 to 28.9 percent in 2008. From 2006 to 2008, Chinese commercial shipments to

other countries increased by 31.2 percent. Throughout the period of investigation, the majority of the

Chinese producers’ shipments went to other markets, ranging from 61.2 percent of total shipments in

2008 to 62.6 percent of total shipments in 2006. The top five Chinese producers reported that *** are

their principal export markets.
VII-5

Table VII-3

Citric acid and certain citrate salts: China’s reported production capacity, production, shipments,

and inventories, 2006-2008 and projections for 2009 and 2010

Item

Actual experience Projections

2006 2007 2008 2009 2010

Quantity (1,000 dry pounds)

Capacity 1,442,509 1,932,143 2,046,552 2,192,791 2,195,911

Production 1,246,571 1,719,444 1,807,432 1,779,437 1,834,004

End-of-period inventories 79,311 106,798 224,453 177,393 127,714

Shipments:

 Internal consumption 10,799 28,503 18,033 13,091 14,082

 Home market 323,077 460,653 474,739 589,208 606,771

 Exports to--

 The United States 142,004 161,090 170,923 83,154 83,394

 All other markets 797,443 1,061,714 1,046,399 1,171,604 1,200,980

 Total exports 939,446 1,222,804 1,217,322 1,254,758 1,284,374

Total shipments 1,273,322 1,711,960 1,710,094 1,857,057 1,905,227

Ratios and shares (percent)

Capacity utilization 86.4 89.0 88.3 81.1 83.5

Inventories to production 6.4 6.2 12.4 10.0 7.0

Inventories to total shipments 6.2 6.2 13.1 9.6 6.7

Shares of total quantity of

shipments:

 Internal consumption 0.8 1.7 1.1 0.7 0.7

 Home market 25.4 26.9 27.8 31.7 31.8

 Exports to--

 The United States 11.2 9.4 10.0 4.5 4.4

 All other markets 62.6 62.0 61.2 63.1 63.0

 Total exports 73.8 71.4 71.2 67.6 67.4

Source: Compiled from data submitted in Commission questionnaire responses.
VII-6

COMBINED INDUSTRY DATA FOR BOTH SUBJECT COUNTRIES

Table VII-4 presents data for capacity, production, and shipments of citric acid and certain citrate

salts from all reporting producers in Canada and China combined. 

Table VII-4

Citric acid and certain citrate salts: Canada and China’s reported production capacity, production,

shipments, and inventories, 2006-2008 and projections for 2009 and 2010

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Reported inventories held by U.S. importers of subject merchandise from Canada, China, and

nonsubject countries are shown in table VII-5.
VII-7

Table VII-5

Citric acid and certain citrate salts: U.S. importers’ end-of-period inventories of subject and

nonsubject imports, by sources, 2006-2008

Source

Calendar year

2006 2007 2008

Imports from Canada:

 Inventories (1,000 dry pounds) *** *** ***

 Ratio to imports (percent) *** *** ***

 Ratio to U.S. shipments of imports (percent) *** *** ***

Imports from China:

 Inventories (1,000 dry pounds) 17,701 28,685 24,376

 Ratio to imports (percent) 12.8 19.2 14.5

 Ratio to U.S. shipments of imports (percent) 14.7 23.8 16.0

Imports from Canada and China:

 Inventories (1,000 dry pounds) *** *** ***

 Ratio to imports (percent) *** *** ***

 Ratio to U.S. shipments of imports (percent) *** *** ***

Imports from nonsubject countries:

 Inventories (1,000 dry pounds) *** *** ***

 Ratio to imports (percent) *** *** ***

 Ratio to U.S. shipments of imports (percent) *** *** ***

Imports from all sources:

 Inventories (1,000 dry pounds) *** *** ***

 Ratio to imports (percent) *** *** ***

 Ratio to U.S. shipments of imports (percent) *** *** ***

Note.–All ratios are calculated using data from firms providing both numerator and denominator information. 

Source: Compiled from data submitted in response to Commission questionnaires.
 12 Official Journal of the European Union, December 3, 2008 (L 323/1).

 13 These firms are: (1) Anhui BBCA Biochemical, (2) RZBC, (3) TTCA, (4) Yixing-Union Biochemical, 

(5) Laiwu Taihe Biochemistry, and (6) Wiefang Ensign. Chinese producers not covered by the price undertaking

agreement would be subject to the 42.7 percent antidumping duty imposed by the EC.

 14 Official Journal of the European Union, December 3, 2008 (L 323/62).

 15 See the India’s Ministry of Commerce and Industry website retrieved on May 6, 2008

http://commerce.nic.in/traderemedies/ad_casesinindia.asp?id=2. In 2003, the government of India imposed

antidumping duties on citric acid from Indonesia and Thailand. In 2007, the government of South Africa terminated

an antidumping duty investigation on citric acid from China for reasons unrelated to its domestic industry’s material

injury. 

 16 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting

from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52;

see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

VII-8

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested U.S. importers to indicate whether they imported or arranged for the

importation of citric acid or certain citrate salts after December 31, 2008. Four of the 30 reporting U.S.

importers stated that they had imported or arranged for importation since December 31, 2008. Table VII6 presents the four U.S. importers which indicated that they had imported or arranged for the importation

of the subject product from Canada or China and the quantity of those U.S. imports.

Table VII-6

Citric acid and certain citrate salts: U.S. importers’ orders of subject imports from Canada and

China subsequent to December 31, 2008, by firm

* * * * * * *

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

On December 1, 2008, the European Union announced the imposition of definitive antidumping

duties on imports of citric acid (including sodium citrate) from China. The definitive duties announced

ranged from 6.6 percent to 42.7 percent.12 However, on December 2, 2008, the EU accepted a “price

undertaking” from six Chinese exporters13 which offered to sell product in the EU at price levels which

would eliminate the injurious effects of dumping.14 

In 2005, the government of India conducted an antidumping duty investigation on its imports of

citric acid from China and Ukraine. On August 25, 2005, it determined that the Indian citric acid industry

was not materially injured and did not impose antidumping duties.15 Petitioners reported that Mexico

imposed antidumping duties on imports of citric acid from China from 2003 until October 2008 at which

time the duties expired. There is no indication that citric acid and certain citrate salts from Canada or

China have been the subject of any import relief investigations in any other countries.

INFORMATION ON PRODUCERS IN NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material injury

“by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”16
 17 ***; Conference transcript, p. 74 (Poulos).

 18 ***.

 19 ***.

 20 GBI and Jiangsu Nuobei Biochemical reportedly have partnered to build a new citric acid plant in Jiangsu,

China. “Gadot-Best Biochemical’s 60,000 t/a citric acid project under construction,” China Corn Products News,

December 2007.

 21 ***.

 22 ***.

 23 ***.

 24 ***.

VII-9

Based on U.S. Government official trade statistics, the following nonsubject countries exported

substantial amounts of citric acid, sodium citrate, or other salts and esters of citric acid to the U.S. market

during the period of investigation: Israel, Colombia, Germany, Thailand, Austria, and Belgium (listed in

descending order of import volume in 2008). 

Table VII-7 presents estimates from *** on citric acid and included in exhibit I-2 of the petition,

which show January 2006 capacities and full-year 2005 production.

Table VII-7: World capacity (January 2006) and production (2005) of citric acid, by country/region

* * * * * * *

In Western Europe, there have been three operating citric acid plants during the period for which

data were collected in these investigations. JBL, the parent of the Canadian respondent, owns the largest

plant with a capacity of *** in Austria. At the time of the last investigation, Austria and Israel were the

two largest sources of nonsubject imports in the U.S. market. Citrique Belge operates the ***, which has

a capacity of ***. Tate & Lyle had a plant in the United Kingdom that had a capacity of ***, but closed

the facility permanently in 2007.17 JBL used to operate an additional citric acid plant in Germany but

closed this plant in 1991 due to logistical issues and currently converts purchased citric acid into citrate

salts at this facility. ADM used to operate a plant in Ireland but it permanently closed the facility in 2005. 

Both ADM and Tate & Lyle assert that imports from China were the reasons for the closures. 

All of the capacity listed for Central and South America is controlled by the petitioners. *** own

the plants in Brazil which have a combined capacity of *** ***.18 *** has *** in the lone plant in

Colombia, which has a capacity of ***.19 

An Israeli company, Gadot Biochemical Industries LTC (“GBI”) with a capacity of ***, is the

largest producer in the Middle East.20 Two Iranian companies have the balance of the capacity in the

region.

*** capacity in Japan ***, Showa Kako, with a capacity of ***, ***.21

The three countries included in “Other Asia” are India, Indonesia, and Thailand. Their capacities

as of January 2006 were ***, ***, and ***, respectively.22

According to ***, the price for citric acid imports was ***.23 The prices for citric acid imports in

***.24

The trade estimates provided in *** showed most of the regions/countries to be net importers. 

The three exceptions to this rule, Central and South America, China, and the Middle East, had net exports

of approximately ***.

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Notices 73955 

1For purposes of these investigations, the 

Department of Commerce hasdefined the subject 

merchandise as ‘‘all grades and granulation sizes of 

citric acid, sodium citrate, and potassium citrate in 

their unblended forms, whether dry or in solution, 

and regardless of packaging type. The scope also 

includes blends of citric acid, sodium citrate, and 

potassium citrate; as well as blends with other 

ingredients, such as sugar, where the unblended 

form(s) of citric acid, sodium citrate, and potassium 

citrate constitute 40 percent or more, by weight, of 

the blend. The scope of this investigation also 

includes all forms of crude calcium citrate, 

Continued 

letter on behalf of the Secretary of 

Interior from the Designated Federal 

Official, transmitted the authorization 

for the state park to effect disposition of 

the human remains and associated 

funerary objects of the culturally 

unidentifiable individuals to the three 

Indian tribes listed above contingent on 

the publication of a Notice of Inventory 

Completion in the Federal Register. 

This notice fulfills that requirement. 

Representatives of any other Indian 

tribe that believes itself to be culturally 

affiliated with the human remains and 

associated funerary objects should 

contact Brian Jaeschke, Registrar, 

Mackinac State Historic Parks, P.O. Box 

873, Mackinaw City, MI 40701, 

telephone (231) 436–4100, fax (231) 

436–4210, before January 5, 2009. 

Disposition of the human remains and 

associated funerary objects to the Bay 

Mills Indian Community, Michigan; 

Little Traverse Bay Band of Odawa, 

Michigan; and Sault Ste. Marie Tribe of 

Chippewa Indians of Michigan may 

proceed after that date if no additional 

claimants come forward. 

Mackinac State Historic Parks is 

responsible for notifying the Bay Mills 

Indian Community, Michigan; Grand 

Traverse Bay Band of Ottawa and 

Chippewa Indians, Michigan; Little 

Traverse Bay Band of Odawa, Michigan; 

and Sault Ste. Marie Tribe of Chippewa 

Indians of Michigan; and the Michigan 

Anishnaabek Cultural Preservation and 

Repatriation Alliance (MACPRA), a nonFederally recognized Indian group, that 

this notice has been published. 

Dated: October 21, 2008 

Sherry Hutt, 

Manager, National NAGPRA Program. 

[FR Doc. E8–28697 Filed 12–3–08; 8:45 am] 

BILLING CODE 4312–50–S 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 337–TA–656] 

In the Matter of Certain Integrated 

Circuits and Products Containing 

Same; Notice of Commission 

Determination Not To Review an Initial 

Determination Terminating the 

Investigation on the Basis of a 

Settlement Agreement 

AGENCY: U.S. International Trade 

Commission. 

ACTION: Notice. 

SUMMARY: Notice is hereby given that 

the U.S. International Trade 

Commission has determined not to 

review the presiding administrative law 

judge’s (‘‘ALJ’’) initial determination 

(‘‘ID’’) (Order No. 7) granting the joint 

motion to terminate the captioned 

investigation based on a settlement 

agreement. 

FOR FURTHER INFORMATION CONTACT: 

Megan M. Valentine, Office of the 

General Counsel, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436, telephone (202) 

708–2301. Copies of non-confidential 

documents filed in connection with this 

investigation are or will be available for 

inspection during official business 

hours (8:45 a.m. to 5:15 p.m.) in the 

Office of the Secretary, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436, 

telephone (202) 205–2000. General 

information concerning the Commission 

may also be obtained by accessing its 

Internet server at http://www.usitc.gov. 

The public record for this investigation 

may be viewed on the Commission’s 

electronic docket (EDIS) at http:// 

edis.usitc.gov. Hearing-impaired 

persons are advised that information on 

this matter can be obtained by 

contacting the Commission’s TDD 

terminal on (202) 205–1810. 

SUPPLEMENTARY INFORMATION: This 

investigation was instituted on 

September 18, 2008, based on a 

complaint filed by Freescale 

Semiconductor, Inc., of Austin, Texas 

(‘‘Freescale’’). 73 FR 54164 (September 

18, 2008). The complaint alleges 

violations of section 337 of the Tariff 

Act of 1930, as amended, 19 U.S.C. 

1337, in the importation into the United 

States, the sale for importation, and the 

sale within the United States after 

importation of certain integrated circuits 

or products containing the same that 

infringe one or more of claims of U.S. 

Patent Nos. 5,467,455; 5,776,798; and 

6,473,349. The complaint further alleges 

the existence of a domestic industry. 

The Commission’s notice of 

investigation named LSI Corporation of 

Milpitas, California (‘‘LSI’’), as the sole 

respondent. 

On October 27, 2008, Freescale and 

LSI jointly moved to terminate the 

investigation on the basis of a settlement 

agreement. On November 6, 2008, the 

Commission investigative attorney filed 

a response supporting the motion. 

On November 10, 2008, the ALJ 

issued the subject ID granting the joint 

motion to terminate the investigation 

based on the settlement agreement. The 

ALJ found that the motion complied 

with the requirements of Commission 

Rule 210.21 (19 CFR 210.21). The ALJ 

also concluded that, pursuant to 

Commission Rule 210.50(b)(2) (19 CFR 

210.50(b)(2)), there is no evidence that 

termination of this investigation will 

prejudice the public interest. No 

petitions for review of this ID were filed. 

The Commission has determined not 

to review the ID. 

The authority for the Commission’s 

determination is contained in section 

337 of the Tariff Act of 1930, as 

amended (19 U.S.C. 1337), and in 

section 210.42 of the Commission’s 

Rules of Practice and Procedure (19 CFR 

210.42). 

By order of the Commission. 

Issued: November 29, 2008. 

William R. Bishop, 

Acting Secretary to the Commission. 

[FR Doc. E8–28698 Filed 12–3–08; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigations Nos. 701–TA–456 and 731– 

TA–1151–1152 (Final)] 

Citric Acid and Certain Citrate Salts 

From Canada and China 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of the final phase of 

countervailing duty and antidumping 

investigations. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of the final 

phase of countervailing duty 

investigation No. 701–TA–456 (Final) 

under section 705(b) of the Tariff Act of 

1930 (19 U.S.C. 1671d(b)) (the Act) and 

the final phase of antidumping 

investigation Nos. 731–TA–1151–1152 

(Final) under section 735(b) of the Act 

(19 U.S.C. 1673d(b)) to determine 

whether an industry in the United 

States is materially injured or 

threatened with material injury, or the 

establishment of an industry in the 

United States is materially retarded, by 

reason of subsidized imports from China 

and less-than-fair-value imports from 

Canada and China of citric acid and 

certain citrate salts, provided for in 

subheadings 2918.14.00, 2918.15.10, 

2918.15.50, and 3824.90.92 of the 

Harmonized Tariff Schedule of the 

United States.1

mstockstill on PROD1PC66 with NOTICES

73956 Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Notices 

including dicalcium citrate monohydrate, and 

tricalcium citrate tetrahydrate, which are 

intermediate products in the production of citric 

acid, sodium citrate, and potassium citrate. The 

scope of this investigation does not include calcium 

citrate that satisfies the standards set forth in the 

United States Pharmacopeia and has been mixed 

with a functional excipient, such as dextrose or 

starch, where the excipient constitutes at least 2%, 

by weight, of the product. The scope of this 

investigation includes the hydrous and anhydrous 

forms of citric acid, the dihydrate and anhydrous 

forms of sodium citrate, otherwise known as citric 

acid sodium salt, and the monohydrate and 

monopotassium forms of potassium citrate. Sodium 

citrate also includes both trisodium citrate and 

monosodium citrate, which are also known as citric 

acid trisodium salt and citric acid monosodium salt, 

respectively. Citric acid and sodium citrate are 

classifiable under 2918.14.0000 and 2918.15.1000 

of the Harmonized Tariff Schedule of the United 

States (HTSUS), respectively. Potassium citrate and 

crude calcium citrate are classifiable under 

2918.15.5000 and 3824.90.9290 of the HTSUS, 

respectively. Blends that include citric acid, sodium 

citrate, and potassium citrate are classifiable under 

3824.90.9290 of the HTSUS. Although the HTSUS 

subheadings are provided for convenience and 

customs purposes, the written description of the 

merchandise is dispositive.’’ 

For further information concerning 

the conduct of this phase of the 

investigations, hearing procedures, and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and C (19 CFR part 207). 

DATES: Effective Date: November 20, 

2008. 

FOR FURTHER INFORMATION CONTACT: 

Christopher J. Cassise (202–708–5408), 

Office of Investigations, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436. 

Hearing-impaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—The final phase of 

these investigations is being scheduled 

as a result of affirmative preliminary 

determinations by the Department of 

Commerce that certain benefits which 

constitute subsidies within the meaning 

of section 703 of the Act (19 U.S.C. 

1671b) are being provided to 

manufacturers, producers, or exporters 

in China of citric acid and certain citric 

salts, and that imports from Canada and 

China are being sold in the United 

States at less than fair value within the 

meaning of section 733 of the Act (19 

U.S.C. 1673b). The investigations were 

requested in a petition filed on April 14, 

2008, by Archer Daniels Midland Co., 

Decatur, IL; Cargill, Inc., Wayzata, MN; 

and Tate & Lyle Americas, Inc., Decatur, 

IL. 

Participation in the investigations and 

public service list.—Persons, including 

industrial users of the subject 

merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in the final phase of these 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

section 201.11 of the Commission’s 

rules, no later than 21 days prior to the 

hearing date specified in this notice. A 

party that filed a notice of appearance 

during the preliminary phase of the 

investigations need not file an 

additional notice of appearance during 

this final phase. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the investigations. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in the final phase of these 

investigations available to authorized 

applicants under the APO issued in the 

investigations, provided that the 

application is made no later than 21 

days prior to the hearing date specified 

in this notice. Authorized applicants 

must represent interested parties, as 

defined by 19 U.S.C. 1677(9), who are 

parties to the investigations. A party 

granted access to BPI in the preliminary 

phase of the investigations need not 

reapply for such access. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Staff report.—The prehearing staff 

report in the final phase of these 

investigations will be placed in the 

nonpublic record on March 24, 2009, 

and a public version will be issued 

thereafter, pursuant to section 207.22 of 

the Commission’s rules. 

Hearing.—The Commission will hold 

a hearing in connection with the final 

phase of these investigations beginning 

at 9:30 a.m. on April 7, 2009, at the U.S. 

International Trade Commission 

Building. Requests to appear at the 

hearing should be filed in writing with 

the Secretary to the Commission on or 

before March 30, 2009. A nonparty who 

has testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the hearing. All parties and 

nonparties desiring to appear at the 

hearing and make oral presentations 

should attend a prehearing conference 

to be held at 9:30 a.m. on April 1, 2009, 

at the U.S. International Trade 

Commission Building. Oral testimony 

and written materials to be submitted at 

the public hearing are governed by 

sections 201.6(b)(2), 201.13(f), and 

207.24 of the Commission’s rules. 

Parties must submit any request to 

present a portion of their hearing 

testimony in camera no later than 7 

business days prior to the date of the 

hearing. 

Written submissions.—Each party 

who is an interested party shall submit 

a prehearing brief to the Commission. 

Prehearing briefs must conform with the 

provisions of section 207.23 of the 

Commission’s rules; the deadline for 

filing is March 31, 2009. Parties may 

also file written testimony in connection 

with their presentation at the hearing, as 

provided in section 207.24 of the 

Commission’s rules, and posthearing 

briefs, which must conform with the 

provisions of section 207.25 of the 

Commission’s rules. The deadline for 

filing posthearing briefs is April 15, 

2009; witness testimony must be filed 

no later than three days before the 

hearing. In addition, any person who 

has not entered an appearance as a party 

to the investigations may submit a 

written statement of information 

pertinent to the subject of the 

investigations, including statements of 

support or opposition to the petition, on 

or before April 15, 2009. On May 1, 

2009, the Commission will make 

available to parties all information on 

which they have not had an opportunity 

to comment. Parties may submit final 

comments on this information on or 

before May 5, 2009, but such final 

comments must not contain new factual 

information and must otherwise comply 

with section 207.30 of the Commission’s 

rules. All written submissions must 

conform with the provisions of section 

201.8 of the Commission’s rules; any 

submissions that contain BPI must also 

conform with the requirements of 

sections 201.6, 207.3, and 207.7 of the 

Commission’s rules. The Commission’s 

rules do not authorize filing of 

submissions with the Secretary by 

facsimile or electronic means, except to 

the extent permitted by section 201.8 of 

the Commission’s rules, as amended, 67 

FR 68036 (November 8, 2002). Even 

where electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 234 / Thursday, December 4, 2008 / Notices 73957 

II(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 FR 

68168, 68173 (November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

investigations must be served on all 

other parties to the investigations (as 

identified by either the public or BPI 

service list), and a certificate of service 

must be timely filed. The Secretary will 

not accept a document for filing without 

a certificate of service. 

Authority: These investigations are 

being conducted under authority of title 

VII of the Tariff Act of 1930; this notice 

is published pursuant to section 207.21 

of the Commission’s rules. 

Issued: December 1, 2008. 

By order of the Commission. 

William R. Bishop, 

Acting Secretary to the Commission. 

[FR Doc. E8–28730 Filed 12–3–08; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[USITC SE–08–034] 

Government in the Sunshine Act 

Meeting Notice 

AGENCY HOLDING THE MEETING: United 

States International Trade Commission. 

TIME AND DATE: December 12, 2008 at 11 

a.m. 

PLACE: Room 101, 500 E Street, SW., 

Washington, DC 20436, Telephone: 

(202) 205–2000. 

STATUS: Open to the public. 

MATTERS TO BE CONSIDERED: 

1. Agenda for future meetings: None. 

2. Minutes. 

3. Ratification List. 

4. Inv. Nos. 701–TA–459 and 731– 

TA–1155 (Preliminary) (Commodity 

Matchbooks from India)—briefing and 

vote. (The Commission is currently 

scheduled to transmit its determinations 

to the Secretary of Commerce on or 

before December 15, 2008; 

Commissioners’ opinions are currently 

scheduled to be transmitted to the 

Secretary of Commerce on or before 

December 22, 2008.) 

5. Outstanding action jackets: None. 

In accordance with Commission 

policy, subject matter listed above, not 

disposed of at the scheduled meeting, 

may be carried over to the agenda of the 

following meeting. 

By order of the Commission. 

Issued: December 1, 2008. 

William R. Bishop, 

Hearings and Meetings Coordinator. 

[FR Doc. E8–28796 Filed 12–3–08; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

United States Parole Commission 

Public Announcement Pursuant to the 

Government in the Sunshine Act 

(Pub. L. 94–409) [5 U.S.C. Section 

552b] 

AGENCY HOLDING MEETING: Department of 

Justice, United States Parole 

Commission. 

TIME AND DATE: 10 a.m., Wednesday, 

December 3, 2008. 

PLACE: 5550 Friendship Blvd., Fourth 

Floor, Chevy Chase, MD 20815. 

STATUS: Open. 

MATTERS TO BE CONSIDERED: The 

following matters have been placed on 

the agenda for the open Parole 

Commission meeting: 

1. Approval of Minutes of August 

2008 Quarterly Business Meeting. 

2. Reports from the Chairman, 

Commissioners, Chief of Staff, and 

Section Administrators. 

AGENCY CONTACT: Thomas W. 

Hutchison, Chief of Staff, United States 

Parole Commission, (301) 492–5990. 

Date: November 26, 2008. 

Rockne J. Chickinell, 

General Counsel, U.S. Parole Commission. 

[FR Doc. E8–28669 Filed 12–3–08; 8:45 am] 

BILLING CODE 4410–31–M 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Information Collection Request for the 

ETA 9128, Reemployment and 

Eligibility Assessments Workloads 

Report, and the ETA 9129, 

Reemployment and Eligibility 

Assessments Outcomes Report: 

Extension Without Change, Comment 

Request 

AGENCY: Employment and Training 

Administration. 

ACTION: Notice. 

SUMMARY: The Department of Labor, as 

part of its continuing effort to reduce 

paperwork and respondent burden, 

conducts a preclearance consultation 

program to provide the general public 

and Federal agencies with an 

opportunity to comment on proposed 

and/or continuing collection of 

information in accordance with the 

Paperwork Reduction Act of 1995 

(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This 

program helps to ensure that requested 

data can be provided in the desired 

format, reporting burden (time and 

financial resources) is minimized, 

collection instruments are clearly 

understood, and the impact of collection 

requirements on respondents can be 

properly assessed. 

A copy of the proposed information 

collection request (ICR) can be obtained 

by contacting the office listed below in 

the addressee section of this notice or by 

accessing: http://www.doleta.gov/ 

OMBCN/OMBControlNumber.cfm. 

DATES: Written comments must be 

submitted to the office listed in the 

addressee section below on or before 

February 2, 2009. 

ADDRESSES: Send comments to Diane 

Wood, U.S. Department of Labor, 

Employment and Training 

Administration, Office of Workforce 

Security, 200 Constitution Avenue, 

NW., Frances Perkins Bldg. Room S– 

4531, Washington, DC 20210, telephone 

number (202) 693–3212 (this is not a 

toll-free number) or by e-mail at 

wood.diane@dol.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background: Funds were awarded 

to participating states in fiscal year 2008 

to continue the Reemployment and 

Eligibility Assessment (REA) initiative. 

The REA guidelines require that these 

funds be used to conduct in-person 

assessments in the One-Stop Career 

Centers. The REA must include an 

unemployment insurance (UI) 

continued eligibility review, the 

provision of labor market information, 

development of a work-search plan and 

referral to reemployment services and/ 

or training, as appropriate. The 

guidelines require that participation 

exclude those claimants who have a 

specific return-to-work date or who 

secure employment solely through a 

union hiring hall. 

II. Desired Focus of Comments: 

Currently, the Employment and 

Training Administration is soliciting 

comments on extending the collection 

of the ETA 9128, Reemployment and 

Eligibility Assessments Workloads 

Report and the ETA 9129, 

Reemployment and Eligibility 

Assessments Outcomes Report. 

Comments are requested to: 

mstockstill on PROD1PC66 with NOTICES

16836 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

Dated: April 6, 2009. 

Christopher Cassel, 

Acting Director, IA Subsidies Enforcement 

Office. 

[FR Doc. E9–8396 Filed 4–10–09; 8:45 am] 

BILLING CODE: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

California Association for Research in 

Astronomy dba W.M. Keck 

Observatory, Notice of Decision on 

Applications for Duty–Free Entry of 

Scientific Instruments 

This is a decision pursuant to Section 

6(c) of the Educational, Scientific, and 

Cultural Materials Importation Act of 

1966 (Pub. L. 89–651, as amended by 

Pub. .106–36; 80 Stat. 897; 15 CFR part 

301). Related records can be viewed 

between 8:30 A.M. and 5:00 P.M. in 

Room 3705, U.S. Department of 

Commerce, 14th and Constitution Ave, 

NW, Washington, D.C. 

Comments: None received. Decision: 

Approved. We know of no instruments 

of equivalent scientific value to the 

foreign instruments described below, for 

such purposes as this is intended to be 

used, that was being manufactured in 

the United States at the time of its order. 

Docket Number: 08–061. Applicant: 

California Association for Research in 

Astronomy dba W.M. Keck Observatory, 

Kamuela, HI 96743. Instrument: Laser 

Launch Telescope Assembly (LTA). 

Manufacturer: Galileo Avionica, Italy. 

Intended Use: See notice at 74 FR 9219, 

March 3, 2009. 

Reasons: This laser launch telescope 

assembly (LTA) has stringent technical 

requirements in regard to optical 

qualities, size, weight, and laser power 

capabilities than standard telescope 

designs that are used for viewing versus 

projection of a laser beam. Unique 

features of this LTA include: 1)it is able 

to handle the laser power of 20 watts of 

589 nanometer light and throughput 

requirements, 2) it has a temperature 

range of -10 degrees C to 10 degrees C, 

and 3) it is able to meet those 

requirements while the unit is moved 

from 0 to 70 degrees zenith angle. 

Dated: April 7, 2009. 

Christopher Cassel, 

Acting Director, Subsidies Enforcement 

Office, Import Administration. 

[FR Doc. E9–8389 Filed 4–10–09; 8:45 am] 

BILLING CODE: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–570–938) 

Citric Acid and Certain Citrate Salts 

From the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(‘‘Department’’) has determined that 

countervailable subsidies are being 

provided to producers and exporters of 

citric acid and certain citrate salts 

(‘‘citric acid’’) from the People’s 

Republic of China (‘‘PRC’’). For 

information on the estimated 

countervailing duty rates, please see the 

‘‘Suspension of Liquidation’’ section, 

below. 

EFFECTIVE DATE: April 13, 2009. 

FOR FURTHER INFORMATION CONTACT: 

David Neubacher, Shelly Atkinson or 

Damian Felton, AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230; telephone: (202) 

482–5823, (202) 482–0116 or (202) 482– 

0133, respectively. 

SUPPLEMENTARY INFORMATION: 

Petitioners 

The petitioners in this investigation 

are Archer Daniels Midland Company, 

Cargill, Incorporated, and Tate & Lyle 

America, Inc. (collectively, 

‘‘Petitioners’’). 

Period of Investigation 

The period for which we are 

measuring subsidies, or period of 

investigation, is January 1, 2007, 

through December 31, 2007. 

Case History 

The following events have occurred 

since the announcement of the 

preliminary determination, which was 

published in the Federal Register on 

September 19, 2008. See Citric Acid and 

Certain Citrate Salts From the People’s 

Republic of China: Preliminary 

Affirmative Countervailing Duty 

Determination and Alignment of Final 

Countervailing Duty Determination With 

Final Antidumping Duty Determination, 

73 FR 54367 (September 19, 2008) 

(‘‘Preliminary Determination’’). 

The Department issued several 

supplemental questionnaires to the 

Government of the People’s Republic of 

China (‘‘GOC’’), TTCA Co., Ltd. 

(formerly Shandong TTCA Biochemical 

Co., Ltd.) (‘‘TTCA’’) and Yixing Union 

Biochemical Co. Ltd. (‘‘Yixing Union’’) 

and its cross–owned affiliate Yixing 

Union Cogeneration Co., Ltd., and 

received responses in September and 

October 2008. 

Public versions of the questionnaires 

and responses, as well as the various 

memoranda cited below are available at 

the Department’s Central Records Unit 

(Room 1117 in the HCHB Building) 

(hereafter referred to as ‘‘CRU’’). 

On September 12, 2008, the 

Department determined to investigate 

certain subsidies alleged by Petitioners 

in their submission of August 8, 2008. 

See Memorandum to Susan Kuhbach, 

Senior Director, Office 1, entitled 

‘‘Analysis of Petitioners’ New Subsidy 

Allegations’’ (September 12, 2008). On 

October 1, 2008, the Department issued 

questionnaires to the GOC, TTCA and 

Yixing Union regarding these new 

subsidy allegations. We received 

responses to these questionnaires as 

well as to supplemental questionnaires 

regarding the newly alleged submissions 

in October 2008. 

On October 20, 2008, the Department 

initiated an investigation of TTCA’s 

creditworthiness for the years 2004, 

2006 and 2007, pursuant to 19 CFR 

351.505(a)(6). See Memorandum to 

Susan H. Kuhbach, Senior Director, 

Office 1, entitled ‘‘Uncreditworthy 

Allegation for TTCA’’ (October 20, 

2008). On February 25, 2009, we issued 

our preliminary determination that 

TTCA was uncreditworthy for the years 

investigated. See Memorandum to 

Susan H. Kuhbach, Senior Office 

Director, AD/CVD Operations, Office 1, 

entitled ‘‘Preliminary Creditworthiness 

Determination for TTCA Co., Ltd.’’ 

(February 25, 2009). 

From November 1 through November 

20, 2008, we conducted verification of 

the questionnaire responses submitted 

by the GOC, TTCA and Yixing Union. 

On March 4, 2009, we issued our 

post–preliminary determination 

regarding the new subsidy allegations 

and certain other programs discovered 

in the course of the investigation. See 

Memorandum to Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration, entitled ‘‘Post– 

Preliminary Findings for the New 

Subsidy Allegations’’ (March 4, 2009). 

We received case briefs from the GOC 

and Yixing Union on March 12, 2009, 

and from Petitioners and TTCA on 

March 13, 2009. The same parties 

submitted rebuttal briefs on March 18 

and 19, 2009, respectively. 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16837 

Scope of the Investigation 

The scope of this investigation 

includes all grades and granulation sizes 

of citric acid, sodium citrate, and 

potassium citrate in their unblended 

forms, whether dry or in solution, and 

regardless of packaging type. The scope 

also includes blends of citric acid, 

sodium citrate, and potassium citrate; as 

well as blends with other ingredients, 

such as sugar, where the unblended 

form(s) of citric acid, sodium citrate, 

and potassium citrate constitute 40 

percent or more, by weight, of the blend. 

The scope of this investigation also 

includes all forms of crude calcium 

citrate, including dicalcium citrate 

monohydrate, and tricalcium citrate 

tetrahydrate, which are intermediate 

products in the production of citric 

acid, sodium citrate, and potassium 

citrate. The scope of this investigation 

does not include calcium citrate that 

satisfies the standards set forth in the 

United States Pharmacopeia and has 

been mixed with a functional excipient, 

such as dextrose or starch, where the 

excipient constitutes at least 2 percent, 

by weight, of the product. The scope of 

this investigation includes the hydrous 

and anhydrous forms of citric acid, the 

dihydrate and anhydrous forms of 

sodium citrate, otherwise known as 

citric acid sodium salt, and the 

monohydrate and monopotassium forms 

of potassium citrate. Sodium citrate also 

includes both trisodium citrate and 

monosodium citrate, which are also 

known as citric acid trisodium salt and 

citric acid monosodium salt, 

respectively. Citric acid and sodium 

citrate are classifiable under 

2918.14.0000 and 2918.15.1000 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS), respectively. 

Potassium citrate and crude calcium 

citrate are classifiable under 

2918.15.5000 and 3824.90.9290 of the 

HTSUS, respectively. Blends that 

include citric acid, sodium citrate, and 

potassium citrate are classifiable under 

3824.90.9290 of the HTSUS. Although 

the HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description of the 

merchandise is dispositive. 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Tariff 

Act of 1930, as amended (‘‘Act’’), 

section 701(a)(2) of the Act applies to 

this investigation. Accordingly, the 

International Trade Commission (‘‘ITC’’) 

must determine whether imports of the 

subject merchandise from the PRC 

materially injure, or threaten material 

injury to a U.S. industry. On June 11, 

2008, the ITC published its preliminary 

determination that there is a reasonable 

indication that an industry in the 

United States is materially injured or 

threatened with material injury by 

reason of imports from China of citric 

acid. See Citric Acid and Certain Citrate 

Salts From Canada and China; 

Determinations, 73 FR 33115 (June 11, 

2008). 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs by parties to this 

investigation are addressed in the 

Memorandum from John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations, to Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration, entitled ‘‘Issues and 

Decision Memorandum for the Final 

Determination in the Countervailing 

Duty Investigation of Citric Acid and 

Certain Citrate Salts from the People’s 

Republic of China’’ (April 6, 2009) 

(hereafter referred to as the ‘‘Decision 

Memorandum), which is hereby 

adopted by this notice. Attached to this 

notice as an Appendix is a list of the 

issues that parties have raised and to 

which we have responded in the 

Decision Memorandum. Parties can find 

this public memorandum in the 

Department’s CRU. In addition, a 

complete version of the Decision 

Memorandum can be accessed directly 

on the Internet at http://ia.ita.doc.gov/ 

frn/. The paper copy and electronic 

version of the Decision Memorandum 

are identical in content. 

Use of Adverse Facts Available 

For purposes of this final 

determination, we have continued to 

rely on facts available and have again 

used adverse inferences in accordance 

with sections 776(a) and (b) of the Act 

to determine the countervailable 

subsidy rates for Anhui BBCA 

Biochemical Co., Ltd. (‘‘Anhui BBCA’’), 

which is one of the three companies 

selected to respond to our 

questionnaires. A full discussion of our 

decision to apply adverse facts available 

is presented in the Decision 

Memorandum in the section ‘‘Use of 

Facts Otherwise Available and Adverse 

Facts Available.’’ 

In a departure from the Preliminary 

Determination, the Department now 

finds that the use of ‘‘facts otherwise 

available’’ is warranted with regard to 

policy lending because TTCA provided 

information that could not be verified. 

See Decision Memorandum, at 

Comment 19. Moreover, TTCA failed to 

cooperate by not acting to the best of its 

ability in this investigation. 

Accordingly, we find that an adverse 

inference is warranted, pursuant to 

section 776(b) of the Act, to ensure that 

TTCA does not obtain a more favorable 

result than had it fully complied with 

our request for information. See 

Decision Memorandum, at Comment 19. 

For reasons explained in the 

‘‘Analysis of Programs’’ section I.A 

(Programs Determined to Be 

Countervailable: Energy and Water 

Savings Grant) in the Decision 

Memorandum, we find the use of ‘‘facts 

otherwise available’’ is warranted, 

pursuant to section 776(a)(2)(A) and (D) 

of the Act, with regard to the specificity 

determination for the Energy and Water 

Savings Grant program because the GOC 

would not provide requested 

information and did not provide 

verifiable program usage data. Because 

the GOC refused to provide information 

that would allow for a de facto 

specificity analysis using accurate and 

verifiable data and failed to act to the 

best of its ability, we have employed an 

adverse inference in selecting from 

among the facts otherwise available. 

Accordingly, pursuant to section 776(b) 

of the Act, we find that this program is 

de facto specific within the meaning of 

section 771(5A)(D)(iii) of the Act. 

Suspension of Liquidation 

In accordance with section 

705(c)(1)(B)(i)(I) of the Act, we have 

calculated an individual rate for the 

companies under investigation, Anhui 

BBCA, TTCA and Yixing Union. Section 

705(c)(5)(A)(i) of the Act states that for 

companies not investigated, we will 

determine an all–others rate equal to the 

weighted average countervailable 

subsidy rates established for exporters 

and producers individually 

investigated, excluding any zero and de 

minimis countervailable subsidy rates, 

and any rates determined entirely under 

section 776 of the Act. As Anhui 

BBCA’s rate was calculated under 

section 776 of the Act, it is not included 

in the all–others rate. 

Notwithstanding the language of 

section 705(c)(5)(A)(i) of the Act, we 

have not calculated the all–others rate 

by weight averaging the rates of TTCA 

and Yixing Union because doing so 

risks disclosure of proprietary 

information. Therefore, we have 

calculated a simple average of the two 

responding firms’ rates. Finally, because 

TTCA’s rate includes export subsidies, 

the all–others rate also includes export 

subsidies. 

16838 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

Exporter/Manufacturer Net Subsidy Rate 

TTCA Co., Ltd. (a.k.a. 

Shandong TTCA Biochemistry Co., Ltd.) ... 12.68 

Yixing Union Biochemical Co., Ltd.; 

and Yixing Union Cogeneration Co., Ltd. .. 3.60 

Anhui BBCA Biochemical Co., Ltd. ..... 118.95 

All–Others ..................... 8.14 

In accordance with section 703(d) of 

the Act, we instructed U.S. Customs and 

Border Protection to discontinue the 

suspension of liquidation for 

countervailing duty purposes for subject 

merchandise entered on or after January 

17, 2009, but to continue the suspension 

of liquidation of entries made from 

September 19, 2008, through January 16, 

2009. 

We will issue a countervailing duty 

order and reinstate the suspension of 

liquidation under section 706(a) of the 

Act if the ITC issues a final affirmative 

injury determination, and will require a 

cash deposit of estimated countervailing 

duties for such entries of merchandise 

in the amounts indicated above. If the 

ITC determines that material injury, or 

threat of material injury, does not exist, 

this proceeding will be terminated and 

all estimated duties deposited or 

securities posted as a result of the 

suspension of liquidation will be 

refunded or canceled. 

ITC Notification 

In accordance with section 705(d) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all non– 

privileged and non–proprietary 

information related to this investigation. 

We will allow the ITC access to all 

privileged and business proprietary 

information in our files, provided the 

ITC confirms that it will not disclose 

such information, either publicly or 

under an APO, without the written 

consent of the Assistant Secretary for 

Import Administration. 

Return or Destruction of Proprietary 

Information 

In the event that the ITC issues a final 

negative injury determination, this 

notice will serve as the only reminder 

to parties subject to an administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is published 

pursuant to sections 705(d) and 777(i) of 

the Act. 

Dated: April 6, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

APPENDIX 

List of Comments and Issues in the 

Decision Memorandum 

General Issues 

Comment 1 Application of CVD Law to 

a Country the Department treats as an 

NME in a Parallel AD Investigation 

Comment 2 Double Counting/ 

Overlapping Remedies 

Comment 3 Requirement to Provide 

Evidence of Lower Prices 

Comment 4 Proposed Cutoff Date for 

Identifying Subsidies 

Program Specific Issues 

Comment 5 Policy Lending Whether 

Policy Lending Program Exists 

Comment 6 Policy Lending Whether CIB 

is a Government Authority 

Comment 7 Benchmark - Whether the 

Department is Required to Use a 

Chinese Benchmark 

Comment 8 Benchmark - Whether 

Department Should Make an Inflation 

Adjustment to Its Regression–based 

Benchmark Rate 

Comment 9 Benchmark - Whether the 

Department has a Basis for Treating 

‘‘Medium–term’’ as Having Terms of 

Two Years or Less 

Comment 10 Benchmark - Whether to 

Remove Certain Countries from the IMF 

Data 

Comment 11 Benchmark - Whether 

Negative Inflation-adjusted Interest 

Rates Should be Excluded from the 

Regressions 

Comment 12 Benchmark - Whether the 

Regression is Statistically Invalid 

Comment 13 Benchmark - Whether the 

Difference Between Long- and Shortterm Interest Rates Cannot be Based on 

BB–grade 

Comment 14 Benchmark - Whether the 

Adjustment for Long-term Rates should 

be Additive or Multiplicative 

Comment 15 Benchmark - Whether the 

Discount Rate Computation is Flawed 

Comment 16 FIE Tax Programs - 

Whether FIE Tax Programs are Specific 

Comment 17 FIE Tax ProgramsWhether They Have Been Terminated 

TTCA Specific Issues 

Comment 18 Whether the Application 

of Total AFA is Warranted 

Comment 19 Whether the Application 

of Partial AFA is Warranted 

Comment 20 Provision of Plant and 

Equipment for LTAR Whether the 

Department is Required to Issue a 

Finding 

Comment 21 Provision of Plant and 

Equipment for LTAR Proposed 

Methodology for Measuring the Benefit 

Comment 22 Provision of Land for 

LTAR Whether Land is a Good or a 

Service 

Comment 23 Provision of Land for 

LTAR Whether the Use of an External 

Benchmark is Appropriate 

Comment 24 Provision of Land for 

LTAR Whether Benchmark is New 

Factual Information 

Comment 25 Whether the Appropriate 

Benchmark Interest Rate for Floating 

Loan 

Comment 26 Whether To Correct a 

Clerical Error in TTCA’s Subsidy 

Calculation 

Yixing Union Specific Issues 

Comment 27 Attribution of Yixing 

Union and Cogeneration Based on 

Cross–Ownership 

Comment 28 Whether to Apply AFA for 

Land in the YEDZ for LTAR Program 

Comment 29 How to Treat the Transfer 

of Allocated to Granted Land-use Rights 

from HPP to Cogeneration 

Comment 30 Whether the Department’s 

Finding Regarding Land–use Rights in 

Yixing City Violates Due Process 

Comment 31 Whether the Department’s 

Finding Regarding the Torch Program 

Violates Due Process 

[FR Doc. E9–8358 Filed 4–10–09; 8:45 am] 

BILLING CODE: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–937] 

Citric Acid and Certain Citrate Salts 

From the People’s Republic of China: 

Final Affirmative Determination of 

Sales at Less Than Fair Value 

AGENCY: International Trade 

Administration, Department of 

Commerce. 

DATES: Effective Date: April 13, 2009. 

SUMMARY: We invited interested parties 

to comment on our preliminary 

determination of sales at LTFV. The 

Department of Commerce (‘‘the 

Department’’) has determined that citric 

acid and certain citrate salts (‘‘citric 

acid’’) from the People’s Republic of 

China (‘‘PRC’’) is being, or is likely to 

be, sold in the United States at LTFV as 

provided in section 735 of the Tariff Act 

of 1930, as amended (‘‘the Act’’). The 

estimated margins of sales at less than 

16838 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

Exporter/Manufacturer Net Subsidy Rate 

TTCA Co., Ltd. (a.k.a. 

Shandong TTCA Biochemistry Co., Ltd.) ... 12.68 

Yixing Union Biochemical Co., Ltd.; 

and Yixing Union Cogeneration Co., Ltd. .. 3.60 

Anhui BBCA Biochemical Co., Ltd. ..... 118.95 

All–Others ..................... 8.14 

In accordance with section 703(d) of 

the Act, we instructed U.S. Customs and 

Border Protection to discontinue the 

suspension of liquidation for 

countervailing duty purposes for subject 

merchandise entered on or after January 

17, 2009, but to continue the suspension 

of liquidation of entries made from 

September 19, 2008, through January 16, 

2009. 

We will issue a countervailing duty 

order and reinstate the suspension of 

liquidation under section 706(a) of the 

Act if the ITC issues a final affirmative 

injury determination, and will require a 

cash deposit of estimated countervailing 

duties for such entries of merchandise 

in the amounts indicated above. If the 

ITC determines that material injury, or 

threat of material injury, does not exist, 

this proceeding will be terminated and 

all estimated duties deposited or 

securities posted as a result of the 

suspension of liquidation will be 

refunded or canceled. 

ITC Notification 

In accordance with section 705(d) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all non– 

privileged and non–proprietary 

information related to this investigation. 

We will allow the ITC access to all 

privileged and business proprietary 

information in our files, provided the 

ITC confirms that it will not disclose 

such information, either publicly or 

under an APO, without the written 

consent of the Assistant Secretary for 

Import Administration. 

Return or Destruction of Proprietary 

Information 

In the event that the ITC issues a final 

negative injury determination, this 

notice will serve as the only reminder 

to parties subject to an administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is published 

pursuant to sections 705(d) and 777(i) of 

the Act. 

Dated: April 6, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

APPENDIX 

List of Comments and Issues in the 

Decision Memorandum 

General Issues 

Comment 1 Application of CVD Law to 

a Country the Department treats as an 

NME in a Parallel AD Investigation 

Comment 2 Double Counting/ 

Overlapping Remedies 

Comment 3 Requirement to Provide 

Evidence of Lower Prices 

Comment 4 Proposed Cutoff Date for 

Identifying Subsidies 

Program Specific Issues 

Comment 5 Policy Lending Whether 

Policy Lending Program Exists 

Comment 6 Policy Lending Whether CIB 

is a Government Authority 

Comment 7 Benchmark - Whether the 

Department is Required to Use a 

Chinese Benchmark 

Comment 8 Benchmark - Whether 

Department Should Make an Inflation 

Adjustment to Its Regression–based 

Benchmark Rate 

Comment 9 Benchmark - Whether the 

Department has a Basis for Treating 

‘‘Medium–term’’ as Having Terms of 

Two Years or Less 

Comment 10 Benchmark - Whether to 

Remove Certain Countries from the IMF 

Data 

Comment 11 Benchmark - Whether 

Negative Inflation-adjusted Interest 

Rates Should be Excluded from the 

Regressions 

Comment 12 Benchmark - Whether the 

Regression is Statistically Invalid 

Comment 13 Benchmark - Whether the 

Difference Between Long- and Shortterm Interest Rates Cannot be Based on 

BB–grade 

Comment 14 Benchmark - Whether the 

Adjustment for Long-term Rates should 

be Additive or Multiplicative 

Comment 15 Benchmark - Whether the 

Discount Rate Computation is Flawed 

Comment 16 FIE Tax Programs - 

Whether FIE Tax Programs are Specific 

Comment 17 FIE Tax ProgramsWhether They Have Been Terminated 

TTCA Specific Issues 

Comment 18 Whether the Application 

of Total AFA is Warranted 

Comment 19 Whether the Application 

of Partial AFA is Warranted 

Comment 20 Provision of Plant and 

Equipment for LTAR Whether the 

Department is Required to Issue a 

Finding 

Comment 21 Provision of Plant and 

Equipment for LTAR Proposed 

Methodology for Measuring the Benefit 

Comment 22 Provision of Land for 

LTAR Whether Land is a Good or a 

Service 

Comment 23 Provision of Land for 

LTAR Whether the Use of an External 

Benchmark is Appropriate 

Comment 24 Provision of Land for 

LTAR Whether Benchmark is New 

Factual Information 

Comment 25 Whether the Appropriate 

Benchmark Interest Rate for Floating 

Loan 

Comment 26 Whether To Correct a 

Clerical Error in TTCA’s Subsidy 

Calculation 

Yixing Union Specific Issues 

Comment 27 Attribution of Yixing 

Union and Cogeneration Based on 

Cross–Ownership 

Comment 28 Whether to Apply AFA for 

Land in the YEDZ for LTAR Program 

Comment 29 How to Treat the Transfer 

of Allocated to Granted Land-use Rights 

from HPP to Cogeneration 

Comment 30 Whether the Department’s 

Finding Regarding Land–use Rights in 

Yixing City Violates Due Process 

Comment 31 Whether the Department’s 

Finding Regarding the Torch Program 

Violates Due Process 

[FR Doc. E9–8358 Filed 4–10–09; 8:45 am] 

BILLING CODE: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–937] 

Citric Acid and Certain Citrate Salts 

From the People’s Republic of China: 

Final Affirmative Determination of 

Sales at Less Than Fair Value 

AGENCY: International Trade 

Administration, Department of 

Commerce. 

DATES: Effective Date: April 13, 2009. 

SUMMARY: We invited interested parties 

to comment on our preliminary 

determination of sales at LTFV. The 

Department of Commerce (‘‘the 

Department’’) has determined that citric 

acid and certain citrate salts (‘‘citric 

acid’’) from the People’s Republic of 

China (‘‘PRC’’) is being, or is likely to 

be, sold in the United States at LTFV as 

provided in section 735 of the Tariff Act 

of 1930, as amended (‘‘the Act’’). The 

estimated margins of sales at less than 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16839 

1See, e.g., Wooden Bedroom Furniture from the 

People’s Republic of China: Final Results of the 

2004–2005 Semi–Annual New Shipper Reviews, 71 

FR 70739 (December 6, 2006) and accompanying 

Issues and Decision Memorandum, at Comment 5; 

and Malleable Iron Pipe Fittings from the People’s 

Republic of China: Preliminary Results of 

Antidumping Duty Administrative Review, 70 FR 

76234, 76238 (December 23, 2005). 

fair value (‘‘LTFV’’) are shown in the 

‘‘Final Determination Margins’’ section 

of this notice. 

FOR FURTHER INFORMATION CONTACT: Lilit 

Astvatsatrian or Andrea Staebler Berton, 

AD/CVD Operations, Office 8, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–6412 or (202) 482– 

4037, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The Department published its 

preliminary determination of sales at 

LTFV on November 20, 2008. See Citric 

Acid and Certain Citrate Salts from the 

People’s Republic of China: Preliminary 

Determination of Sales at Less Than 

Fair Value and Postponement of Final 

Determination, 73 FR 70328 (November 

20, 2008) (‘‘Preliminary 

Determination’’). The period of 

investigation (‘‘POI’’) is October 1, 2007, 

to March 31, 2008. 

Between January 7 and 20, 2009, the 

Department conducted verifications of 

TTCA Co., Ltd. (aka Shandong TTCA 

Biochemistry Co., Ltd.) (‘‘TTCA’’) and 

Yixing Union Biochemical Co., Ltd. 

(‘‘Yixing Union’’) (‘‘respondents’’). See 

the ‘‘Verification’’ section below for 

additional information. 

We invited interested parties to 

comment on the Preliminary 

Determination. On February 25, 2009, 

Archer Daniels Midland Company, 

Cargill, Incorporated, and Tate & Lyle 

Americas, Inc. (collectively, 

‘‘Petitioners’’), TTCA, and Yixing Union 

filed case briefs. On March 2, 2009, 

Petitioners, TTCA, and Yixing Union 

filed rebuttal briefs. The Department 

held a hearing on March 12, 2009. 

Verification 

As provided in section 782(i) of the 

Act, we verified the information 

submitted by TTCA and Yixing Union 

for use in our final determination. See 

the Department’s verification reports on 

the record of this investigation in the 

Central Records Unit (‘‘CRU’’), Room 

1117 of the main Department building, 

with respect to these entities. For all 

verified companies, we used standard 

verification procedures, including 

examination of relevant accounting and 

production records, as well as original 

source documents provided by 

respondents. 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs, and at the hearing, by 

parties to this investigation are 

addressed in the ‘‘Issues and Decision 

Memorandum for the Investigation of 

Citric Acid and Certain Citrate Salts 

from the People’s Republic of China,’’ 

dated concurrently with this notice and 

which is hereby adopted by this notice 

(‘‘Issues and Decision Memorandum’’). 

A list of the issues which parties raised 

and to which we respond in the Issues 

and Decision Memorandum is attached 

to this notice as an Appendix. The 

Issues and Decision Memorandum is a 

public document and is on file in the 

CRU, and is accessible on the Web at 

http://ia.ita.doc.gov/frn. The paper copy 

and electronic version of the 

memorandum are identical in content. 

Changes Since the Preliminary 

Determination 

Based on our analysis of information 

on the record of this investigation, we 

have made changes to the margin 

calculations for the final determination 

for all mandatory respondents. 

General Issues 

• We have updated the Indonesian 

and Indian inflator information for the 

wholesale price index (‘‘WPI’’) as 

published in the International Financial 

Statistics of the International Monetary 

Fund. See Final Determination of the 

Antidumping Duty Investigation of 

Citric Acid and Certain Citrate Salts 

from the People’s Republic of China: 

Surrogate Value Memorandum, dated 

April 6, 2009 (‘‘Final SV Memo’’), at 2. 

All inflated or deflated surrogate values 

were revised as a result of the updated 

inflators. See Issues and Decision 

Memorandum, at Comment 6. 

• For the final determination, we 

deflated the surrogate values for marine 

insurance and truck freight. See Final 

SV Memo, at 2, and Issues and Decision 

Memorandum, at Comment 4. 

• We have revised the surrogate value 

for sodium lignosulphonate. See Final 

SV Memo, at 3, and Issues and Decision 

Memorandum, at Comment 11B. 

• We have revised the surrogate 

financial ratios by including interest 

expenses in the SG&A calculation. See 

Final SV Memo, at 3, and Issues and 

Decision Memorandum, at Comment 3. 

• Consistent with our practice,1 we 

have excluded beginning and ending 

finished goods inventories from the 

calculation of surrogate financial ratios 

for the final determination. See Final SV 

Memo, at 3. 

• Based on the surrogate financial 

company’s treatment of certain 

depreciation and warehouse expenses as 

selling expenses, and depreciation and 

repairs and maintenance as general and 

administrative expenses, we have 

reclassified these expenses from the 

surrogate factory overhead ratio to the 

surrogate selling, general, and 

administrative ratio calculation for the 

final determination. See Final SV 

Memo, at 3–4. 

• We were unable to segregate and, 

therefore, were unable to exclude energy 

costs from the calculation of the 

surrogate financial ratios. Accordingly, 

we have disregarded the respondents’ 

energy inputs (coal and steam byproduct offsets for TTCA, electricity and 

steam for Yixing Union) in the 

calculation of normal value for purposes 

of the final determination, in order to 

avoid double-counting energy costs 

which have necessarily been captured 

in the surrogate financial ratios. See 

Investigation of Citric Acid and Certain 

Citrate Salts from the People’s Republic 

of China: Analysis of the Final 

Determination Margin Calculation for 

TTCA Co., Ltd., (a.k.a. Shandong TTCA 

Biochemistry Co., Ltd.), dated April 6, 

2009 (‘‘TTCA Final Analysis Memo’’), at 

2; see also Investigation of Citric Acid 

and Certain Citrate Salts from the 

People’s Republic of China: Analysis of 

the Final Determination Margin 

Calculation for Yixing Union 

Biochemical Co., Ltd., dated April 6, 

2009 (‘‘Yixing Union Final Analysis 

Memo’’), at 1–2; and Issues and 

Decision Memorandum at Comment 2. 

Company-Specific Changes Since the 

Preliminary Determination 

TTCA 

• For the final determination, we 

have adjusted TTCA’s indirect labor. 

See TTCA Final Analysis Memo at 1–2 

and Issues and Decision Memorandum, 

at Comment 10. 

• For the final determination, we 

have added TTCA’s billing adjustment 

expense to the gross unit price. See 

TTCA Final Analysis Memo, at 2 and 

Issues and Decision Memorandum, at 

Comment 11A. 

• We have included TTCA’s low 

protein scrap by-product in the 

calculation of the normal value. See 

TTCA Final Analysis Memo, at 2–3 and 

Issues and Decision Memorandum, at 

Comment 15. 

• We have adjusted TTCA’s reported 

consumption of calcium carbonate to 

account for the under-reported usage 

16840 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

rate. See TTCA Final Analysis Memo, at 

3. 

Yixing Union 

• We have valued Yixing Union’s 

ocean freight using the reported 

international freight. See Yixing Union 

Final Analysis Memo. 

Scope of Investigation 

The scope of this investigation 

includes all grades and granulation sizes 

of citric acid, sodium citrate, and 

potassium citrate in their unblended 

forms, whether dry or in solution, and 

regardless of packaging type. The scope 

also includes blends of citric acid, 

sodium citrate, and potassium citrate; as 

well as blends with other ingredients, 

such as sugar, where the unblended 

form(s) of citric acid, sodium citrate, 

and potassium citrate constitute 40 

percent or more, by weight, of the blend. 

The scope of this investigation also 

includes all forms of crude calcium 

citrate, including dicalcium citrate 

monohydrate, and tricalcium citrate 

tetrahydrate, which are intermediate 

products in the production of citric 

acid, sodium citrate, and potassium 

citrate. The scope of this investigation 

does not include calcium citrate that 

satisfies the standards set forth in the 

United States Pharmacopeia and has 

been mixed with a functional excipient, 

such as dextrose or starch, where the 

excipient constitutes at least 2%, by 

weight, of the product. The scope of this 

investigation includes the hydrous and 

anhydrous forms of citric acid, the 

dihydrate and anhydrous forms of 

sodium citrate, otherwise known as 

citric acid sodium salt, and the 

monohydrate and monopotassium forms 

of potassium citrate. Sodium citrate also 

includes both trisodium citrate and 

monosodium citrate, which are also 

known as citric acid trisodium salt and 

citric acid monosodium salt, 

respectively. Citric acid and sodium 

citrate are classifiable under 

2918.14.0000 and 2918.15.1000 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS), respectively. 

Potassium citrate and crude calcium 

citrate are classifiable under 

2918.15.5000 and 3824.90.9290 of the 

HTSUS, respectively. Blends that 

include citric acid, sodium citrate, and 

potassium citrate are classifiable under 

3824.90.9290 of the HTSUS. Although 

the HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description of the 

merchandise is dispositive. 

Surrogate Country 

In the Preliminary Determination, we 

stated that we had selected Indonesia as 

the appropriate surrogate country to use 

in this investigation for the following 

reasons: (1) it is a significant producer 

of comparable merchandise; (2) it is at 

a similar level of economic development 

comparable to that of the PRC; and (3) 

we have reliable data from Indonesia 

that we can use to value the factors of 

production. See Preliminary 

Determination. For the final 

determination, we continue to use 

Indonesia as the primary surrogate 

country. See Issues and Decision 

Memorandum, at Comment 1. 

Separate Rates 

In proceedings involving non-marketeconomy (‘‘NME’’) countries, the 

Department begins with a rebuttable 

presumption that all companies within 

the country are subject to government 

control and, thus, should be assigned a 

single antidumping duty deposit rate. It 

is the Department’s policy to assign all 

exporters of merchandise subject to an 

investigation in an NME country this 

single rate unless an exporter can 

demonstrate that it is sufficiently 

independent so as to be entitled to a 

separate rate. See Final Determination of 

Sales at Less Than Fair Value: Sparklers 

from the People’s Republic of China, 56 

FR 20588 (May 6, 1991) (‘‘Sparklers’’), 

as amplified by Notice of Final 

Determination of Sales at Less Than 

Fair Value: Silicon Carbide from the 

People’s Republic of China, 59 FR 22585 

(May 2, 1994) (‘‘Silicon Carbide’’), and 

19 CFR 351.107(d). 

In the Preliminary Determination, we 

found that TTCA, Yixing Union and 11 

separate rate applicants demonstrated 

their eligibility for separate rate status. 

For the final determination, we continue 

to find that the evidence placed on the 

record of this investigation by TTCA, 

Yixing Union, and the separate rate 

applicants demonstrate both a de jure 

and de facto absence of government 

control, with respect to their respective 

exports of the merchandise under 

investigation, and, thus continue to find 

that they are eligible for separate rate 

status. 

Use of Facts Available 

Section 776(a)(2) of the Act, provides 

that, if an interested party: (A) 

Withholds information that has been 

requested by the Department; (B) fails to 

provide such information in a timely 

manner or in the form or manner 

requested subject to sections 782(c)(1) 

and (e) of the Act; (C) significantly 

impedes a proceeding under the 

antidumping statute; or (D) provides 

such information but the information 

cannot be verified, the Department 

shall, subject to subsection 782(d) of the 

Act, use facts otherwise available in 

reaching the applicable determination. 

Section 782(c)(1) of the Act provides 

that if an interested party ‘‘promptly 

after receiving a request from (the 

Department) for information, notifies 

(the Department) that such party is 

unable to submit the information 

requested in the requested form and 

manner, together with a full explanation 

and suggested alternative forms in 

which such party is able to submit the 

information,’’ the Department may 

modify the requirements to avoid 

imposing an unreasonable burden on 

that party. 

Section 782(d) of the Act provides 

that, if the Department determines that 

a response to a request for information 

does not comply with the request, the 

Department will inform the person 

submitting the response of the nature of 

the deficiency and shall, to the extent 

practicable, provide that person the 

opportunity to remedy or explain the 

deficiency. If that person submits 

further information that continues to be 

unsatisfactory, or this information is not 

submitted within the applicable time 

limits, the Department may, subject to 

section 782(e), disregard all or part of 

the original and subsequent responses, 

as appropriate. 

Section 782(e) of the Act states that 

the Department shall not decline to 

consider information deemed 

‘‘deficient’’ under section 782(d) if: (1) 

The information is submitted by the 

established deadline; (2) the information 

can be verified; (3) the information is 

not so incomplete that it cannot serve as 

a reliable basis for reaching the 

applicable determination; (4) the 

interested party has demonstrated that it 

acted to the best of its ability; and (5) 

the information can be used without 

undue difficulties. 

Furthermore, section 776(b) of the Act 

states that if the Department ‘‘finds that 

an interested party has failed to 

cooperate by not acting to the best of its 

ability to comply with a request for 

information from the administering 

authority or the Commission, the 

administering authority or the 

Commission * * *, in reaching the 

applicable determination under this 

title, may use an inference that is 

adverse to the interests of that party in 

selecting from among the facts 

otherwise available.’’ See also 

Statement of Administrative Action 

(SAA) accompanying the Uruguay 

Round Agreements Act (URAA), H.R. 

Rep. No. 103–316, Vol. 1 at 870 (1994). 

For this final determination, in 

accordance with sections 776(a)(2)(A), 

(B) and (D) and 776(b) of the Act, we 

have determined that the use of adverse 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16841 

facts available (‘‘AFA’’) is warranted for 

the PRC-wide entity, as discussed 

below. 

The PRC-Wide Rate 

Because we begin with the 

presumption that all companies within 

an NME country are subject to 

government control and because only 

the companies listed under the ‘‘Final 

Determination Margins’’ section below 

have overcome that presumption, we are 

applying a single antidumping rate—the 

PRC-wide rate—to all other exporters of 

subject merchandise from the PRC. See, 

e.g., Synthetic Indigo from the People’s 

Republic of China: Notice of Final 

Determination of Sales at Less Than 

Fair Value, 65 FR 25706 (May 3, 2000). 

The PRC-wide rate applies to all entries 

of subject merchandise except for 

entries from the respondents identified 

as receiving a separate rate in the ‘‘Final 

Determination Margins’’ section below. 

In the Preliminary Determination, the 

Department found that the PRC-wide 

entity did not respond to our requests 

for information because record evidence 

indicates there were more exporters of 

citric acid from the PRC during the POI 

than those that were found to be eligible 

for a separate rate and responded to the 

Q&V questionnaire or the full 

antidumping questionnaire. Therefore, 

in the Preliminary Determination we 

treated these PRC exporters as part of 

the PRC-wide entity because they did 

not demonstrate that they operate free of 

government control over their export 

activities. No additional information 

was placed on the record with respect 

to these entities after the Preliminary 

Determination. In addition, because the 

PRC-wide entity has not provided the 

Department with the requested 

information, pursuant to section 

776(a)(2)(A) and (C) of the Act, the 

Department continues to find that the 

use of facts available is appropriate to 

determine the PRC-wide rate. Section 

776(b) of the Act provides that, in 

selecting from among the facts 

otherwise available, the Department 

may employ an adverse inference if an 

interested party fails to cooperate by not 

acting to the best of its ability to comply 

with requests for information. See 

Notice of Final Determination of Sales 

at Less Than Fair Value: Certain ColdRolled Flat-Rolled Carbon-Quality Steel 

Products from the Russian Federation, 

65 FR 5510, 5518 (February 4, 2000). 

See also SAA at 870. We have 

determined that, because the PRC-wide 

entity did not respond to our request for 

information, it has failed to cooperate to 

the best of its ability. Therefore, the 

Department finds that, in selecting from 

among the facts otherwise available, an 

adverse inference is warranted. 

In the Preliminary Determination, as 

facts available, we assigned to the PRCwide entity the margin alleged in the 

petition, i.e., 156.87 percent. See 

Preliminary Determination, 73 FR at 

70332. For the final determination, we 

have continued to assign to the PRCwide entity the rate of 156.87 percent. 

Corroboration 

Section 776(c) of the Act provides 

that, when the Department relies on 

secondary information in using the facts 

otherwise available, it must, to the 

extent practicable, corroborate that 

information from independent sources 

that are reasonably at its disposal. We 

have interpreted ‘‘corroborate’’ to mean 

that we will, to the extent practicable, 

examine the reliability and relevance of 

the information submitted. See Notice of 

Final Determination of Sales at Less 

Than Fair Value: Certain Cold-Rolled 

Flat-Rolled Carbon-Quality Steel 

Products from Brazil, 65 FR 5554, 5568 

(February 4, 2000); see, e.g., Tapered 

Roller Bearings and Parts Thereof, 

Finished and Unfinished, from Japan, 

and Tapered Roller Bearings, Four 

Inches or Less in Outside Diameter, and 

Components Thereof, from Japan; 

Preliminary Results of Antidumping 

Duty Administrative Reviews and 

Partial Termination of Administrative 

Reviews, 61 FR 57391, 57392 (November 

6, 1996), unchanged in Tapered Roller 

Bearings and Parts Thereof, Finished 

and Unfinished, from Japan, and 

Tapered Roller Bearings, Four Inches or 

Less in Outside Diameter, and 

Components Thereof, from Japan: Final 

Results of Antidumping Duty 

Administrative Reviews and 

Termination in Part, 62 FR 11825 

(March 13, 1997). The Department’s 

reliance on the petition rate to 

determine an AFA rate is subject to the 

requirement to corroborate secondary 

information. 

At the Preliminary Determination, in 

accordance with section 776(c) of the 

Act, we corroborated our AFA margin 

by comparing the U.S. prices and 

normal values from the petition to the 

U.S. prices and normal values for the 

mandatory respondents. Similarly, for 

the final determination, we have also 

compared the U.S. prices and normal 

values from the petition (that were used 

to derive the margin for our initiation of 

this proceeding) to the U.S. prices and 

normal values for the mandatory 

respondents. We found that the U.S. 

prices and normal values used to 

calculate the initiation margin were 

within the range of net U.S. prices and 

normal values, respectively, used in our 

margin calculations for the mandatory 

respondents in this investigation. 

Because no parties commented on the 

selection of the PRC-wide rate, we 

continue to find that the margin of 

156.87 percent has probative value. 

Accordingly, we find that the rate of 

156.87 percent is corroborated within 

the meaning of section 776(c) of the Act. 

Combination Rates 

In the Preliminary Determination, the 

Department stated that it would 

calculate combination rates for the 

respondents that are eligible for a 

separate rate in this investigation. See 

Preliminary Determination, 73 FR at 

62961. This practice is described in 

Policy Bulletin 05.1, ‘‘Separate Rates 

Practice and Application of 

Combination Rates in Antidumping 

Investigations Involving Non-Market 

Economy Countries’’ available at 

http://ia.ita.doc.gov/policy/index.html. 

Final Determination Margins 

We determine that the following 

percentage weighted-average margins 

exist for the POI: 

Exporter Producer Margin 

TTCA Co., Ltd. (a.k.a. Shandong TTCA Biochemistry Co., 

Ltd.).

TTCA Co., Ltd. (a.k.a. Shandong TTCA Biochemistry Co., 

Ltd.).

129.08 

Yixing Union Biochemical Co., Ltd ............................................. Yixing Union Biochemical Co., Ltd ............................................. 94.61 

Anhui BBCA Biochemical Co., Ltd ............................................. Anhui BBCA Biochemical Co., Ltd ............................................. 111.85 

Anhui BBCA Biochemical Co., Ltd ............................................. China BBCA Maanshan Biochemical Corp ................................ 111.85 

A.H.A. International Co., Ltd ...................................................... Yixing Union Biochemical Co., Ltd ............................................. 111.85 

A.H.A. International Co., Ltd ...................................................... Nantong Feiyu Fine Chemical Co., Ltd ...................................... 111.85 

High Hope International Group Jiangsu Native Produce IMP & 

EXP Co., Ltd.

Yixing Union Biochemical Co., Ltd ............................................. 111.85 

Huangshi Xinghua Biochemical Co., Ltd .................................... Huangshi Xinghua Biochemical Co., Ltd .................................... 111.85 

16842 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

Exporter Producer Margin 

Lianyungang JF International Trade Co., Ltd ............................ TTCA Co., Ltd. (a.k.a. Shandong TTCA Biochemistry Co., 

Ltd.).

111.85 

Laiwu Taihe Biochemistry Co., Ltd ............................................ Laiwu Taihe Biochemistry Co., Ltd ............................................ 111.85 

Lianyungang Shuren Scientific Creation Import & Export Co., 

Ltd.

Lianyungang Great Chemical Industry Co., Ltd ......................... 111.85 

Penglai Marine Bio-Tech Co. Ltd ............................................... Penglai Marine Bio-Tech Co. Ltd ............................................... 111.85 

RZBC Imp & Exp. Co., Ltd./RZBC Co., Ltd./RZBC (Juxian) 

Co., Ltd.

RZBC Co., Ltd ............................................................................ 111.85 

RZBC Imp & Exp. Co., Ltd./RZBC Co., Ltd./RZBC (Juxian) 

Co., Ltd.

RZBC (Juxian) Co., Ltd .............................................................. 111.85 

RZBC Imp & Exp. Co., Ltd./RZBC Co., Ltd./RZBC (Juxian) 

Co., Ltd.

Lianyungang Great Chemical Industry Co., Ltd ......................... 111.85 

Shihezi City Changyun Biochemical Co., Ltd ............................ Shihezi City Changyun Biochemical Co., Ltd ............................ 111.85 

Weifang Ensign Industry Co., Ltd .............................................. Weifang Ensign Industry Co., Ltd .............................................. 111.85 

PRC-Wide Entity ......................................................................... ..................................................................................................... 156.87 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 19 

CFR 351.224(b). 

Continuation of Suspension of 

Liquidation 

In accordance with section 

735(c)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(‘‘CBP’’) to continue to suspend 

liquidation of all imports of subject 

merchandise entered or withdrawn from 

warehouse, for consumption on or after 

November 20, 2008, the date of 

publication of the Preliminary 

Determination in the Federal Register. 

We will instruct CBP to continue to 

require a cash deposit or the posting of 

a bond for all companies based on the 

estimated weighted-average dumping 

margins shown above, adjusted for the 

export subsidy rate determined in CVD 

Citric Acid Final (i.e., countervailable 

subsidy of 1.76 percent ad valorem). See 

Citric Acid and Certain Citrate Salts 

From the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination (‘‘CVD Citric Acid 

Final’’), to be published concurrently 

with this notice. Furthermore, for all 

separate-rate recipients that were not 

selected as mandatory respondents, we 

will instruct CBP to require an 

antidumping cash deposit or the posting 

of a bond for each entry equal to the 

average of the margins calculated for the 

mandatory respondents, adjusted for 

their respective export subsidy rates, if 

applicable, from CVD Citric Acid Final. 

The suspension of liquidation 

instructions will remain in effect until 

further notice. 

ITC Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (‘‘ITC’’) 

of our final determination of sales at 

LTFV. As our final determination is 

affirmative, in accordance with section 

735(b)(2) of the Act, within 45 days the 

ITC will determine whether the 

domestic industry in the United States 

is materially injured, or threatened with 

material injury, by reason of imports or 

sales (or the likelihood of sales) for 

importation of the subject merchandise. 

If the ITC determines that material 

injury or threat of material injury does 

not exist, the proceeding will be 

terminated and all securities posted will 

be refunded or canceled. If the ITC 

determines that such injury does exist, 

the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the effective 

date of the suspension of liquidation. 

Notification Regarding APO 

This notice also serves as a reminder 

to the parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305. Timely 

notification of return or destruction of 

APO materials or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and the terms of an APO is a 

sanctionable violation. 

This determination and notice are 

issued and published in accordance 

with sections 735(d) and 777(i)(1) of the 

Act. 

Dated: April 6, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix 

General Issues 

Comment 1: Selection of Surrogate Country 

Comment 2: Treatment of Energy in the 

Surrogate Financial Statements 

Comment 3: Treatment of Interest Expense 

and Income in Selling, General and 

Administrative Expenses 

Comment 4: Correct Calculation for the 

Inflator of the Indian Trucking Value 

Comment 5A: Surrogate Value for 

Hydrochloric Acid/Hydrogen Chloride 

Comment 5B: Surrogate Value for Calcium 

Carbonate 

Comment 5C: Surrogate Value for Coal 

Comment 5D: Surrogate Value for Water 

Comment 5E: Surrogate Value for Brokerage 

and Handling 

Comment 6: Indonesian Inflator 

Comment 7: Valuation of High Protein Corn 

By-Product 

Comment 8: Additional Expenses for Sales of 

Corn Feed By-Product Offset 

Issues Specific to TTCA 

Comment 9: Date of Sale: Contract Date 

Versus Invoice Date 

Comment 10: Adjustment of TTCA’s Labor 

Factors 

Comment 11A: Correction of Clerical Error in 

Application of Billing Adjustment 

Comment 11B: Correction of Clerical Error in 

the Surrogate Value of Sodium 

Lignosulphonate 

Comment 12: Offset for Steam By-Product 

Comment 13: Use of TTCA’s MarketEconomy Freight Costs 

Comment 14: Adjustment of the Surrogate 

Value for Hydrochloric Acid/Hydrogen 

Chloride 

Comment 15: Low-Protein Scrap Offset 

Issues Specific to Yixing Union 

Comment 16: Yixing Union Corn Usage Rate 

Comment 17: Yixing Union Mycelium ByProduct Offset 

Comment 18: Inflation of the Surrogate Value 

for Steam 

[FR Doc. E9–8359 Filed 4–10–09; 8:45 am] 

BILLING CODE 3510–DS–P 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16843 

1The petitioners in this investigation are Archer 

Daniels Midland Company, Cargill, Incorporated, 

and Tate & Lyle Americas, Inc. 

2See Memorandum to the File through James 

Maeder, Director Office 2 from Rebecca Trainor and 

Kate Johnson International Trade Compliance 

Analysts Office 2, ‘‘Verification of the Sales 

Response of Jungbunzlauer Technology GMBH & 

Co. KG (JBLT) in the Antidumping Investigation of 

Citric Acid and Certain Citrate Salts from Canada,’’ 

dated February 5, 2009 (Sales Verification Report). 

3See Memorandum to the File through Neal M. 

Harper, Director of Office of Accounting from James 

Balog Senior Accountant, Office of Accounting, 

‘‘Verification of the Cost Response of Jungbunzlauer 

Technology GMBH & Co. KG in the Antidumping 

Investigation of Citric Acid and Certain Citrate Salts 

from Canada,’’ dated February 24, 2009 (Cost 

Verification Report). 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–122–853 

Notice of Final Determination of Sales 

at Less Than Fair Value: Citric Acid 

and Certain Citrate Salts from Canada 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: We determine that imports of 

citric acid and certain citrate salts (citric 

acid) are being, or are likely to be, sold 

in the United States at less than fair 

value (LTFV), as provided in section 

735 of the Tariff Act of 1930, as 

amended (the Act). The estimated 

margins of sales at LTFV are shown in 

the ‘‘Final Determination Margins’’ 

section of this notice. 

EFFECTIVE DATE: April 13, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Terre Keaton Stefanova or Rebecca 

Trainor, AD/CVD Operations, Office 2, 

Import Administration, International 

Trade Administration, U.S. Department 

of Commerce, 14th Street and 

Constitution Avenue, NW, Washington, 

DC 20230; telephone: (202) 482–1280 or 

(202) 482–4007, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On November 20, 2008, the 

Department of Commerce (Department) 

published in the Federal Register the 

preliminary determination of sales at 

LTFV in the antidumping duty 

investigation of citric acid from Canada. 

See Citric Acid and Certain Citrate Salts 

from Canada: Notice of Preliminary 

Determination of Sales at Less Than 

Fair Value and Postponement of Final 

Determination, 73 FR 70324 (November 

20, 2008) (Preliminary Determination). 

In November and December 2008, the 

respondent, Jungbunzlauer Technology 

GMBH & Co KG (JBLT), submitted 

revised home market and U.S. sales 

listings and cost data. On December 1, 

2008, we received pre–verification 

comments from the petitioners.1 On 

December 18, 2008, the petitioners 

requested a hearing to discuss issues 

addressed by the interested parties in 

their case and rebuttal briefs. From 

December 9 through December 16, 2008, 

we verified the respondent’s sales data. 

On January 6, 2009, the respondent 

informed the Department that its 

Canadian operations had recently 

undergone a corporate restructuring 

which resulted in JBL Canada, Inc. 

becoming the producer, seller and 

exporter of citric acid from Canada, 

effective December 31, 2008. For further 

discussion, see ‘‘Corporate 

Restructuring’’ section below. 

From January 12 through January 16, 

2009, we verified the respondent’s cost 

data. On February 5, 2009, we issued 

the sales verification report,2 and 

requested that the respondent submit a 

revised home market and U.S. sales 

listing per verification findings. We 

received the revised sales listings on 

February 17, 2009. On February 24, 

2009, we issued the cost verification 

report.3 We provided the interested 

parties an opportunity to comment on 

the Preliminary Determination and the 

Department’s verification findings. 

On February 26, 2009, the petitioners 

withdrew their request for a hearing. On 

March 3 and March 9, 2009, 

respectively, the petitioners and 

respondent each submitted case and 

rebuttal briefs. Because the petitioners 

were the only interested party to request 

a hearing and it subsequently withdrew 

its request, no hearing was held on 

issues raised in the case and rebuttal 

briefs. 

Period of Investigation 

The period of investigation (POI) is 

April 1, 2007, through March 31, 2008. 

This period corresponds to the four 

most recent fiscal quarters prior to the 

month of the filing of the petition. 

Scope of Investigation 

The scope of this investigation 

includes all grades and granulation sizes 

of citric acid, sodium citrate, and 

potassium citrate in their unblended 

forms, whether dry or in solution, and 

regardless of packaging type. The scope 

also includes blends of citric acid, 

sodium citrate, and potassium citrate; as 

well as blends with other ingredients, 

such as sugar, where the unblended 

form(s) of citric acid, sodium citrate, 

and potassium citrate constitute 40 

percent or more, by weight, of the blend. 

The scope of this investigation also 

includes all forms of crude calcium 

citrate, including dicalcium citrate 

monohydrate, and tricalcium citrate 

tetrahydrate, which are intermediate 

products in the production of citric 

acid, sodium citrate, and potassium 

citrate. The scope of this investigation 

does not include calcium citrate that 

satisfies the standards set forth in the 

United States Pharmacopeia and has 

been mixed with a functional excipient, 

such as dextrose or starch, where the 

excipient constitutes at least 2 percent, 

by weight, of the product. The scope of 

this investigation includes the hydrous 

and anhydrous forms of citric acid, the 

dihydrate and anhydrous forms of 

sodium citrate, otherwise known as 

citric acid sodium salt, and the 

monohydrate and monopotassium forms 

of potassium citrate. Sodium citrate also 

includes both trisodium citrate and 

monosodium citrate, which are also 

known as citric acid trisodium salt and 

citric acid monosodium salt, 

respectively. Citric acid and sodium 

citrate are classifiable under 

2918.14.0000 and 2918.15.1000 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS), respectively. 

Potassium citrate and crude calcium 

citrate are classifiable under 

2918.15.5000 and 3824.90.9290 of the 

HTSUS, respectively. Blends that 

include citric acid, sodium citrate, and 

potassium citrate are classifiable under 

3824.90.9290 of the HTSUS. Although 

the HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description of the 

merchandise is dispositive. 

Corporate Restructuring 

The respondent reported, and the 

Department verified, that during the 

POI, three subsidiaries of the 

Jungbunzlauer Group (JBL Group) were 

involved in the production and sale of 

citric acid to the United States. The 

production of citric acid in Canada 

involved two separate legal entities, 

JBLT and JBL Canada, Inc. JBLT was 

responsible for citric acid production 

and JBL Canada Inc. was responsible for 

infrastructure and personnel in 

connection with JBLT’s operations. The 

third entity, JBL Inc., located in the 

United States was responsible for selling 

products from the JBL Group (including 

JBLT) to the United States, Canada and 

Mexico. 

As noted above, during the course of 

this investigation JBLT informed the 

Department that it had undergone a 

corporate restructuring. We requested 

that JBLT submit a detailed explanation 

and supporting documentation of the 

corporate restructuring. We also 

provided the petitioners the opportunity 

to file comments. See January 23, 2009 

Memorandum to the File, and the 

16844 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

4See JBLT’s October 9, 2008, Response to 

Supplemental Questions Regarding Currency 

Conversions and Date of Sale at 3; and JBLT’s 

October 14, 2008, First Supplemental Questionnaire 

Response at 5–6. 

5Because we could not isolate the U.S. inland 

freight expenses that were affected by the 

inappropriate currency conversions, we are 

applying facts available to all reported U.S. inland 

freight expenses. 

January 9 and 14, 2009, submissions 

from JBLT. We did not receive 

comments from the petitioners on this 

matter. At verification we examined the 

corporate restructuring information 

submitted by JBLT (see Cost Verification 

Report at 4). 

Based on the corporate restructuring 

documentation, as verified, JBL Canada 

Inc., rather than JBLT, is the entity 

responsible for all the activities related 

to Canadian citric acid production and 

exportation, effective December 31, 

2008. Therefore, we will assign the final 

determination margin to JBL Canada, 

Inc. 

Verification 

As provided in section 782(i) of the 

Act, we verified the sales and cost 

information submitted by the 

respondent for use in our final 

determination. We used standard 

verification procedures including an 

examination of relevant accounting and 

production records, and original source 

documents provided by the respondent. 

Our sales and cost verification results 

are outlined in separate verification 

reports. See Sales Verification Report 

and Cost Verification Report. The 

verification reports are on file and 

available in the Central Records Unit, 

Room 1117 of the Commerce 

Department. 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs submitted by the parties 

to this investigation are addressed in the 

‘‘Issues and Decision Memorandum for 

the Final Determination in the Less– 

Than-Fair–Value Investigation of Citric 

Acid and Certain Citrate Salts from 

Canada’’ from John Anderson, Acting 

Deputy Assistant Secretary for Import 

Administration, to Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration (Decision Memo), dated 

April 6, 2009, which is hereby adopted 

by this notice. A list of the issues that 

parties have raised and to which we 

have responded, all of which are in the 

Decision Memo, is attached to this 

notice as an appendix. Parties can find 

a complete discussion of all issues 

raised in this investigation and the 

corresponding recommendations in the 

Decision Memo, which is on file in the 

Central Records Unit, Room 1117 of the 

Commerce Department. In addition, a 

complete version of the Decision Memo 

can be accessed directly on the Web at 

http://ia.ita.doc.gov/frn. The paper copy 

and electronic version of the Decision 

Memo are identical in content. 

Changes Since the Preliminary 

Determination 

Based on our analysis of the 

comments received and our findings at 

verification, we have made certain 

changes to the margin calculations for 

JBL Canada Inc. For a discussion of 

these changes, see the ‘‘Margin 

Calculations’’ section of the Decision 

Memo. 

Facts Available 

Section 776(a) of the Act provides that 

the Department will apply ‘‘facts 

otherwise available’’ if necessary 

information is not available on the 

record or an interested party: 1) 

withholds information that has been 

requested by the Department; 2) fails to 

provide such information within the 

deadlines established, or in the form or 

manner requested by the Department, 

subject to subsections (c)(1) and (e) of 

section 782 of the Act; 3) significantly 

impedes a proceeding; or 4) provides 

such information, but the information 

cannot be verified. As stated in the 

Preliminary Determination, our 

antidumping questionnaire instructs 

respondents to report prices and 

expenses in the currency in which they 

were incurred. See Preliminary 

Determination at 73 FR 70327. 

Nevertheless, in this case, the 

respondent reported data that had been 

converted from multiple currencies into 

Canadian dollars (CAD) in the home 

market, and into U.S. dollars (USD) in 

the U.S. market because its company– 

wide electronic data processing system 

(SAP) automatically converts all foreign 

currency transactions into the currency 

of the respective JBL Group entity at the 

moment of posting. According to the 

respondent, the entry of data and the 

currency conversion is a simultaneous 

process in its accounting system. As a 

result, SAP does not retain the original 

foreign currency amount in the sales 

database or in the general ledger.4 Based 

on the respondent’s representation that 

the currency conversion process is a 

company–wide procedure that is done 

in the normal course of business, we 

accepted the data as reported for the 

preliminary determination. However, 

we stated our intention to examine the 

reasonableness of the price and expense 

reporting based on this system at 

verification. See Preliminary 

Determination at 73 FR 70327. 

At verification, we found that the SAP 

system does maintain a record of the 

original currency from which entries 

were converted and the exchange rate 

used. Therefore, the price and expense 

data could have been reported in the 

original foreign currency amount as 

incurred. See Sales Verification Report 

at 4 and 5. Based on our verification 

findings, we believe that it was possible 

for the respondent to have reported 

prices and expenses in the currency in 

which they were incurred, contrary to 

the representation in the respondent’s 

questionnaire responses. For these 

reasons, we find that it is appropriate to 

resort to facts otherwise available to 

account for the unreported information. 

See, e.g., Canned Pineapple Fruit from 

Thailand, 68 FR 65247 (November 19, 

2003), and accompanying Issues and 

Decision Memorandum at Comment 20b 

where the Department applied facts 

otherwise available to a respondent that 

did not provide requested information. 

Therefore, we have determined that the 

gross unit prices for certain home 

market customers who were invoiced in 

USD during the POI (see the Sales 

Verification Report at Exhibit 4), and all 

U.S inland freight expenses should be 

based on facts available in accordance 

with sections 776(a)(2)(A),(B), and (D) of 

the Act.5

In selecting from among the facts 

otherwise available, section 776(b) of 

the Act authorizes the Department to 

use an adverse inference if the 

Department finds that an interested 

party failed to cooperate by not acting 

to the best of its ability to comply with 

a request for information. See, e.g., 

Notice of Final Results of Antidumping 

Duty Administrative Review: Stainless 

Steel Bar from India, 70 FR 54023, 

54025–26 (September 13, 2005); see also 

Notice of Final Determination of Sales 

at Less Than Fair Value and Final 

Negative Critical Circumstances: Carbon 

and Certain Alloy Steel Wire Rod from 

Brazil, 67 FR 55792, 55794–96 (August 

30, 2002). The Statement of 

Administrative Action provides 

guidance by explaining that adverse 

inferences are appropriate ‘‘to ensure 

that the party does not obtain a more 

favorable result by failing to cooperate 

than if it had cooperated fully.’’ See 

Statement of Administrative Action 

accompanying the Uruguay Round 

Agreements Act, H.R. Doc. No. 103–316, 

Vol. 1, at 870 (1994). Furthermore, 

‘‘affirmative evidence of bad faith on the 

part of a respondent is not required 

before the Department may make an 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16845 

adverse inference.’’ See Antidumping 

Duties; Countervailing Duties, 62 FR 

27296, 27340 (May 19, 1997); see also 

Nippon Steel Corp. v. United States, 337 

F.3d 1373, 1383 (Fed. Cir. 2003) 

(Nippon). Because: 1) the respondent 

had the necessary information within its 

control and it did not report this 

information; and 2) it failed to put forth 

its maximum effort to provide the 

requested information, we find that the 

respondent failed to cooperate to the 

best of its ability. Therefore, for the final 

determination, we are using facts 

available with an adverse inference and 

applying it to the gross unit prices of 

certain home market sales, and to all 

U.S. inland freight expenses. 

Specifically, as adverse facts available, 

we increased both the affected home 

market sales prices and the U.S. freight 

expenses by 1.16 percent, i.e., the 

percentage difference between the 

Department’s weighted–average POI 

exchange rate (used to convert 

comparison–market values to USD in 

the margin program), and JBLT’s POI 

average exchange rate (used by JBLT’s 

SAP system for currency conversion 

purposes). For further discussion, see 

Decision Memo at Comment 4 and the 

April 6, 2009, Memorandum to The File 

from Case Analyst, entitled 

‘‘Calculations Performed for 

Jungbunzlauer Technology GMBH & Co. 

KG for the Final Determination in the 

Antidumping Duty Investigation of 

Citric Acid and Certain Citrate Salts 

from Canada.’’ 

Continuation of Suspension of 

Liquidation 

In accordance with section 

735(c)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(CBP) to continue to suspend 

liquidation of all imports of subject 

merchandise that are entered or 

withdrawn from warehouse, for 

consumption on or after November 20, 

2008, the date of publication of the 

preliminary determination in the 

Federal Register. We will instruct CBP 

to continue to require a cash deposit or 

the posting of a bond for all companies 

based on the estimated weighted– 

average dumping margins shown below. 

The suspension of liquidation 

instructions will remain in effect until 

further notice. 

Final Determination Margins 

We determine that the following 

weighted–average dumping margins 

exist for the period April 1, 2007, 

through March 31, 2008: 

Manufacturer/Exporter Weighted Average 

Margin (percent) 

JBL Canada, Inc. .......... 23.21 

All Others ...................... 23.21 

All–Others Rate 

Section 735(c)(5)(A) of the Act 

provides that the estimated ‘‘All– 

Others’’ rate shall be an amount equal 

to the weighted average of the estimated 

weighted–average dumping margins 

established for exporters and producers 

individually investigated, excluding any 

zero or de minimis margins, and any 

margins determined entirely under 

section 776 of the Act. In this 

investigation the Department calculated 

a company–specific rate only for JBL 

Canada Inc. Therefore, for purposes of 

determining the all–others rate and 

pursuant to section 735(c)(5)(A) of the 

Act, we are using the weighted–average 

dumping margin calculated for JBL 

Canada, Inc., as referenced above. See, 

e.g., Notice of Final Determination of 

Sales at Less Than Fair Value: Stainless 

Steel Sheet and Strip in Coils From 

Italy, 64 FR 30750, 30755 (June 8, 1999); 

and Coated Free Sheet Paper from 

Indonesia: Notice of Preliminary 

Determination of Sales at Less Than 

Fair Value and Postponement of Final 

Determination,, 72 FR 30753, 30757 

(June 4, 2007), unchanged in final 

determination, Notice of Final 

Determination of Sales at Less Than 

Fair Value: Coated Free Sheet Paper 

from Indonesia, 72 FR 60636 (October 

25, 2007). 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 19 

CFR 351.224(b). 

International Trade Commission 

Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (ITC) of 

our final determination. As our final 

determination is affirmative, the ITC 

will determine within 45 days whether 

imports of the subject merchandise are 

causing material injury, or threat of 

material injury, to an industry in the 

United States. If the ITC determines that 

material injury or threat of injury does 

not exist, the proceeding will be 

terminated and all securities posted will 

be refunded or canceled. If the ITC 

determines that such injury does exist, 

the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the effective 

date of the suspension of liquidation. 

Return or Destruction of Proprietary 

Information 

This notice will serve as the only 

reminder to parties subject to 

administrative protective order (APO) of 

their responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and the terms of an 

APO is a sanctionable violation. 

We are issuing and publishing this 

determination and notice in accordance 

with sections 735(d) and 777(i) of the 

Act. 

Dated: April 6, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix--Issues in Decision Memo 

Comments 

Comment 1: Date of Sale and Whether 

to Exclude U.S. Sales Made Pursuant to 

Multiyear Contracts 

Comment 2: Indirect Selling Expenses 

Comment 3: Home Market Billing 

Adjustments 

Comment 4: Currency Conversions 

Reported for Certain Home Market Sales 

Prices and U.S. Freight Expenses 

Comment 5: Electricity Purchased from 

an Affiliate 

Comment 6: General and Administrative 

(G&A) Expense Ratio 

[FR Doc. E9–8357 Filed 4–10–09; 8:45 am] 

BILLING CODE: 3510–DS–S 

DEPARTMENT OF COMMERCE 

Bureau of the Census 

2010 Census Advisory Committee 

AGENCY: Bureau of the Census, 

Department of Commerce. 

ACTION: Notice of public meeting. 

SUMMARY: The Bureau of the Census 

(U.S. Census Bureau) is giving notice of 

a meeting of the 2010 Census Advisory 

Committee. The Committee will address 

policy, research, and technical issues 

related to 2010 Decennial Census 

Programs. Last-minute changes to the 

agenda are possible, which could 

prevent giving advance notification of 

schedule changes. 

DATES: May 7–8, 2009. On May 7, the 

meeting will begin at approximately 

B-1

APPENDIX B

HEARING WITNESSES

B-3

CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade Commission’s

hearing:

Subject: Citric Acid and Certain Citrate Salts from Canada and China 

Inv. Nos.: 701-TA-456 and 731-TA-1151-1152 (Final)

Date and Time: April 7, 2009 - 9:30 a.m.

Sessions were held in connection with these investigations in the Main Hearing Room (room

101), 500 E Street, SW, Washington, DC.

OPENING REMARKS:

Petitioners (Neil R. Ellis, Sidley Austin LLP)

Respondents (Donald B. Cameron, Troutman Sanders LLP)

In Support of the Imposition of Antidumping and Countervailing Duty Orders:

Sidley Austin LLP

Washington, DC

on behalf of

Archer Daniels Midland Co. (“ADM”)

Cargill, Inc.

Tate & Lyle Americas, Inc. (“Tate & Lyle”)

Michael R. Baroni, President, Specialty Food Ingredients Division, ADM, 

John Oakley, Business Director - Food Additives, Specialty Food Ingredients, ADM

Eric S. Warner, Jr., Plant Manager, ADM

Brian Tschosik, Division Controller, ADM

Mark Christiansen, Acidulants Sales Manager, Corn Milling, Cargill, Inc.

Jack Staloch, Vice President, Acidulants Product Line Manager; R&D Director,

Biotechnology Development Center, Cargill, Inc.

L. Martin Hurt, Manager, Food Ingredients, Americas, Tate & Lyle

Curtis A. Poulos, Commercial Director, Food Ingredients - Acidulants, Tate & Lyle

Peter G. Lorusso, Vice President, Sales and Marketing, TLC Ingredients

Larry Richardson, Staff Representative, United Steel Workers

Charles L. Anderson, Principal, Capital Trade, Inc.

Andrew A. Szamosszegi, Managing Consultant, Capital Trade, Inc.

Neil R. Ellis )

Jill Caiazzo ) – OF COUNSEL

Geoffrey D. Antell )
B-4

In Opposition to the Imposition of the Antidumping and Countervailing Duty Orders:

Troutman Sanders LLP

Washington, DC

on behalf of

The Chinese Citric Acid Producers Coalition

Wang Qi, Vice Manager of Asia-Pacific Sales Department, Anhui BBCA Biochemical

Co., Ltd.

Kou Guangzhi, Chairman of the Board, RZBC Co., Ltd.

Eric Shao, General Manager, RZBC Import and Export Co., Ltd.

Robert W. Bloom, President and CEO, FBC Industries, Inc.

Julie C. Mendoza )

Donald B. Cameron )

 – OF COUNSEL R. Will Planert )

Judy Z. Wang )

Vorys, Sater, Seymour and Pease LLP

Washington, DC

on behalf of

Jungbunzlauer Technology GmbH & Co. KG (“JBL”)

Dan Rainville, President, JBL Inc.

Dr. Patrick Magrath, Economist, Georgetown Economic Services

Frederick P. Waite )

 – OF COUNSEL Kimberly R. Young )

Neville Peterson LLP

Washington, DC

on behalf of

PepsiCo, Inc.

Barry Taylor, Purchasing Director, Pepsi Worldwide Flavors, PepsiCo, Inc.

George Thompson ) – OF COUNSEL
B-5

In Opposition to the Imposition of the Antidumping and Countervailing Duty Orders (Continued):

Lafave Associates

Washington, DC

on behalf of

The Procter & Gamble Manufacturing Co. (“P&G”)

A. Matt Smith, Senior Purchasing Manager, P&G

James Hodges, Purchasing Group Manager, P&G

Dr. Kenneth Button, Senior Vice President, Economic Consulting Services LLC

Jennifer Lutz, Senior Economist, Economic Consulting Services LLC

Arthur J. Lafave III ) – OF COUNSEL

Arnold & Porter LLP

Washington, DC

on behalf of

Reckitt Benckiser Inc.

Klaus Hofmann, Senior Vice President, Global Procurement, Reckitt Benckiser

Group plc

Michael T. Shor ) – OF COUNSEL

Kelley Drye & Warren LLP

Washington, DC

on behalf of

Vertellus Specialties, Inc.

Tom Pensak, Director, Sales and Marketing, Vertellus Performance 

Materials, Inc.

Michael J. Coursey ) – OF COUNSEL

CLOSING REMARKS:

Petitioners (Neil R. Ellis, Sidley Austin LLP)

Respondents (Frederick P. Waite, Vorys, Sater, Seymour and Pease LLP)

C-1

APPENDIX C

SUMMARY DATA

Table C-1

Citric acid and certain citrate salts: Summary data concerning the U.S. market, 2006-2008

(Quantity=1,000 dry pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

Item 2006 2007 2008 2006-08 2006-07 2007-08

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** ***

 Importers' share (1):

 Canada . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 China . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** ***

 Importers' share (1):

 Canada . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 China . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** ***

U.S. imports from:

 Canada:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** ***

 China:

 Quantity . . . . . . . . . . . . . . . . . 158,906 180,108 193,727 21.9 13.3 7.6

 Value . . . . . . . . . . . . . . . . . . . 65,542 76,571 118,342 80.6 16.8 54.6

 Unit value . . . . . . . . . . . . . . . $0.41 $0.43 $0.61 48.1 3.1 43.7

 Ending inventory quantity . . . 17,701 28,685 24,376 37.7 62.0 -15.0

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . 68,584 65,634 55,594 -18.9 -4.3 -15.3

 Value . . . . . . . . . . . . . . . . . . . 39,174 38,802 41,058 4.8 -0.9 5.8

 Unit value . . . . . . . . . . . . . . . $0.57 $0.59 $0.74 29.3 3.5 24.9

 Ending inventory quantity . . . *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** ***

Table continued on next page.

C-3
Table C-1--Continued

Citric acid and certain citrate salts: Summary data concerning the U.S. market, 2006-2008

(Quantity=1,000 dry pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

Item 2006 2007 2008 2006-08 2006-07 2007-08

U.S. producers':

 Average capacity quantity . . . . 553,913 553,913 553,913 0.0 0.0 0.0

 Production quantity . . . . . . . . . 475,428 488,403 507,917 6.8 2.7 4.0

 Capacity utilization (1) . . . . . . . 85.8 88.2 91.7 5.9 2.3 3.5

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . 369,451 399,578 402,518 9.0 8.2 0.7

 Value . . . . . . . . . . . . . . . . . . . 165,013 180,132 214,641 30.1 9.2 19.2

 Unit value . . . . . . . . . . . . . . . $0.45 $0.45 $0.53 19.4 0.9 18.3

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . 96,709 114,348 112,996 16.8 18.2 -1.2

 Value . . . . . . . . . . . . . . . . . . . 41,042 47,381 57,541 40.2 15.4 21.4

 Unit value . . . . . . . . . . . . . . . $0.42 $0.41 $0.51 20.0 -2.4 22.9

 Ending inventory quantity . . . . 77,606 52,316 44,638 -42.5 -32.6 -14.7

 Inventories/total shipments (1) 16.6 10.2 8.7 -8.0 -6.5 -1.5

 Production workers . . . . . . . . . 306 300 292 -4.6 -2.0 -2.7

 Hours worked (1,000s) . . . . . . 701 687 669 -4.5 -1.9 -2.6

 Wages paid ($1,000) . . . . . . . . 22,656 21,781 21,751 -4.0 -3.9 -0.1

 Hourly wages . . . . . . . . . . . . . $32.34 $31.70 $32.50 0.5 -2.0 2.5

 Productivity (pounds per hour) 678.6 710.8 758.9 11.8 4.7 6.8

 Unit labor costs . . . . . . . . . . . . $0.05 $0.04 $0.04 -10.1 -6.4 -4.0

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . 466,160 513,924 515,514 10.6 10.2 0.3

 Value . . . . . . . . . . . . . . . . . . . 205,773 226,909 271,708 32.0 10.3 19.7

 Unit value . . . . . . . . . . . . . . . $0.44 $0.44 $0.53 19.4 0.0 19.4

 Cost of goods sold (COGS) . . 202,849 235,123 266,120 31.2 15.9 13.2

 Gross profit or (loss) . . . . . . . . 2,924 (8,214) 5,588 91.1 (2) (2)

 SG&A expenses . . . . . . . . . . . 13,653 13,420 13,093 -4.1 -1.7 -2.4

 Operating income or (loss) . . . (10,729) (21,634) (7,505) 30.0 -101.6 65.3

 Capital expenditures . . . . . . . . 6,534 7,746 5,537 -15.3 18.5 -28.5

 Unit COGS . . . . . . . . . . . . . . . $0.44 $0.46 $0.52 18.6 5.1 12.8

 Unit SG&A expenses . . . . . . . $0.03 $0.03 $0.03 -13.3 -10.8 -2.7

 Unit operating income or (loss) ($0.02) ($0.04) ($0.01) 36.7 -82.9 65.4

 COGS/sales (1) . . . . . . . . . . . . 98.6 103.6 97.9 -0.6 5.0 -5.7

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . (5.2) (9.5) (2.8) 2.5 -4.3 6.8

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis.

Because of rounding, figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4
C-5

Table C-2

Citric acid: Summary data concerning the U.S. market, 2006-2008

* * * * * * *

Table C-3

Sodium citrate: Summary data concerning the U.S. market, 2006-2008

* * * * * * *

Table C-4

Potassium citrate: Summary data concerning the U.S. market, 2006-2008

* * * * * * *

D-1

APPENDIX D

LARGEST PURCHASERS’ DATA ON BIDS AND PRICES
D-2
D-3

MAJOR U.S. PURCHASERS’ BID INFORMATION

Table D-1

Citric acid and certain citrate salts: Information on the three largest bids of U.S. purchasers of

more than 20 million pounds in one year, 2006-2008

*******

Reasons for choosing the supplier(s) of the winning bid(s):

*******
D-4

Table D-2

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities reported by

purchasers of domestic and imported product 1,1

 by spot and contract purchases, and by quarters,

January 2006-December 2008

Period

United States Canada China

Price

(per pound)

Quantity

(1,000 dry

pounds)

Price

(per pound)

Quantity

(1,000 dry

pounds)

Price

(per pound)

Quantity

(1,000 dry

pounds)

Spot purchases

2006:

 Jan.-Mar. $*** *** $*** *** $*** ***

 Apr.-June -- 0 *** *** *** ***

 July-Sept. *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** ***

2007:

 Jan.-Mar. *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** ***

2008:

 Jan.-Mar. *** *** *** *** *** ***

 Apr.-June *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** ***

Contract purchases

2006:

 Jan.-Mar. 0.53 10,160 *** *** -- 0

 Apr.-June 0.52 11,407 *** *** -- 0

 July-Sept. 0.53 11,842 *** *** -- 0

 Oct.-Dec. 0.54 9,503 *** *** -- 0

2007:

 Jan.-Mar. 0.57 11,440 *** *** -- 0

 Apr.-June 0.54 13,701 *** *** -- 0

 July-Sept. 0.57 12,085 *** *** -- 0

 Oct.-Dec. 0.57 12,081 *** *** -- 0

2008:

 Jan.-Mar. 0.53 13,535 *** *** *** ***

 Apr.-June 0.52 14,933 *** *** *** ***

 July-Sept. 0.52 13,842 *** *** *** ***

 Oct.-Dec. 0.52 13,309 *** *** *** ***

 1 Citric acid, granular, in dry form in 25-kilogram and 50-pound bags.

Source: Compiled from responses to Commission questionnaires.
D-5

Table D-3

Citric acid and certain citrate salts: Weighted-average delivered contract prices and quantities

reported by purchasers of domestic and imported products 2 and 3, by quarters, January

2006-December 2008

*******
D-6

Table D-4

Citric acid and certain citrate salts: Weighted-average delivered prices and quantities reported by

purchasers of domestic and imported products 4 and 5,1

 by quarters, January 2006-December 2008

Period

United States China Nonsubject

Price

(per pound)

Quantity

(1,000 dry

pounds)

Price

(per pound)

Quantity

(1,000 dry

pounds)

Price

(per pound)

Quantity

(1,000 dry

pounds)

Product 4

2006:

 Jan.-Mar. $0.47 1,371 $*** *** $*** ***

 Apr.-June 0.47 1,696 *** *** *** ***

 July-Sept. 0.47 1,706 *** *** *** ***

 Oct.-Dec. 0.47 1,226 *** *** *** ***

2007:

 Jan.-Mar. 0.49 1,454 -- 0 *** ***

 Apr.-June 0.51 1,889 *** *** *** ***

 July-Sept. 0.50 1,596 *** *** *** ***

 Oct.-Dec. 0.50 1,541 *** *** *** ***

2008:

 Jan.-Mar. 0.54 1,527 -- 0 *** ***

 Apr.-June 0.55 1,772 *** *** *** ***

 July-Sept. 0.55 1,615 *** *** *** ***

 Oct.-Dec. 0.54 1,460 *** *** *** ***

Product 5

2006:

 Jan.-Mar. *** *** *** *** -- 0

 Apr.-June *** *** *** *** -- 0

 July-Sept. *** *** *** *** -- 0

 Oct.-Dec. *** *** *** *** -- 0

2007:

 Jan.-Mar. *** *** *** *** -- 0

 Apr.-June *** *** *** *** -- 0

 July-Sept. *** *** *** *** -- 0

 Oct.-Dec. *** *** *** *** -- 0

2008:

 Jan.-Mar. *** *** *** *** -- 0

 Apr.-June *** *** *** *** -- 0

 July-Sept. *** *** *** *** -- 0

 Oct.-Dec. *** *** *** *** -- 0

 1 Product 4 is sodium citrate, granular, in dry form in 25-kilogram and 50-pound bags, and product 5 is potassium

citrate, granular, in dry form in 25-kilogram and 50-pound bags.

Source: Compiled from responses to Commission questionnaires.