Commerce Wrongly Refused to Conduct Quarterly Cost Analysis, Citrate Salt Exporter Argues

A citric acid exporter said Feb. 9 that the Commerce Department had been wrong to refuse to do a quarterly analysis of the exporter’s costs, even though it had faced large cost fluctuations due to the COVID-19 pandemic (Citribel N.V. v. U.S., CIT # 24-00010).

Exporter Citribel brought suit at the Court of International Trade contesting Commerce’s final results in its antidumping duty administrative review on citric acid and certain citrate salts from Belgium.

During the review -- in which Citribel was a respondent -- the exporter said it reported its costs of materials on a quarterly basis because both its costs and prices “changed drastically” during the period of review. The jump between its lowest and highest quarterly costs was at least 25% and there was a “reasonably positive correlation” between its costs and prices, meaning it met the “two requirements for Commerce to apply its quarterly cost methodology,” Citribel said.

Commerce, however, issued the exporter a supplemental questionnaire “instructing Citribel to report its ‘quarterly’ [costs of manufacturing] using annualized conversion costs,” Citribel said. That was despite the fact that in the initial questionnaire, “cost of manufacturing” had included both raw material costs and conversion costs, it said.

Citribel provided its annualized conversion costs along with its quarterly raw materials costs, which showed that the change between its lowest and highest quarterly costs was now 9% to 14%, the exporter said. In a further response, it provided cost data based on quarterly income statements.

It said it also included more information about the things that had affected its conversion costs during the period of review, arguing that failure to consider them would result in a “serious distortion.”

“Citribel also explained that it has experienced a significant increase in its conversion costs due to the macroeconomic conditions caused by the economic recovery from the Covid-19 pandemic and the Russian invasion of Ukraine,” the exporter said. “Citribel provided supporting information including the EU inflation data, energy prices, and labor cost indices.”

Commerce released its preliminary results of the review in July 2023. In them, it determined that Citribel didn't qualify for a quarterly cost methodology “because the percentage difference between the low-COM quarter and the high-COM quarter did not exceed 25 percent,” Citribel said.

Commerce said it analyzed the factors Citribel had put forward as affecting its conversion costs, but the department did so “based on Citribel’s annualized conversion costs, which by definition could not reflect any cost changes,” Citribel said. And in Commerce’s final determination, which came to the same conclusion, the department didn't clarify further, it said.

Commerce’s choice to not rely on a quarterly analysis for Citribel was unsupported by substantial evidence, arbitrary, capricious and not in accordance with law, Citribel said. It asked CIT to remand the final results of the review back to Commerce with instructions to conduct a quarterly analysis on Citribel’s costs.