Saccharin from China - USITC

PART V: PRICING AND RELATED INFORMATIONFACTORS AFFECTING PRICINGRaw Material CostsRaw materials constitute an important part of the final cost of saccharin. During 2003-08, PMC'sraw material costs were *** of the cost of goods sold in 2003, *** percent in 2004, *** percent in 2005,*** percent in 2006, *** percent in 2007 and *** percent in 2008. The starting material that PMCcurrently uses in producing saccharin is ***.Transportation Costs to the U.S. MarketOcean transportation costs for saccharin shipped from China to the United States averaged about1.0 percent of the customs value of these imports during 2008. This estimate is derived from officialimport data and represents the transportation and other charges on imports. 1U. S. Inland Transportation CostsU.S. inland transportation costs generally account for a small share of the delivered price ofsaccharin. PMC reported that these costs accounted for about *** percent of the total delivered cost.Estimates by importers ranged from less than 1 percent to 5 percent, with the majority reporting shares of1 percent or less.Inland shipping distances for U.S.-produced saccharin were compared with those for importsfrom China. PMC reported that *** percent of its U.S. sales occur within 100 miles of its productionfacility, *** percent are within distances of 101 to 1,000 miles, and *** percent occur at distances of over1,000 miles from its facility. For firms reporting imports from China during 2008, an average of 5percent of sales occur within 100 miles of importers’ storage facilities or ports of entry, 94 percent arewithin 101 to 1,000 miles, and less than 1 percent involve distances of over 1,000 miles.Exchange RatesThe nominal exchange rate for the Chinese yuan in relation to the U.S. dollar is shown on aquarterly basis in figure V-1 for the period January-March 2003 through July-September 2008. The datashow that the yuan has appreciated relative to the dollar since 2003. A real exchange rate could not becomputed because of the lack of producer price indices for China. 21The estimated cost was obtained by subtracting the customs value from the c.i.f. value of the imports for 2008and then dividing by the customs value.2A real exchange rate is calculated by adjusting the nominal rate for movements in producer prices in the UnitedStates and other countries.V-1