Page 312 - Manual Of SOP

Injury Analysis

11.7.24. Price Depression or Superposition Depression refers to a situation when
the domestic producer is not able to recover the cost because it is forced to keep
prices down in order to compete with the imported goods. Price Depression is
determined by comparing the cost of sales of the subject goods of the DI with its
selling price. Price Suppression, on the other hand,refers to the situation where the
domestic producer is restrained from increasing the selling prices i.e. increase in
price which otherwise should have been there in normal circumstances is restrained
or even if they do actually increase, the increase is less than it would otherwise
have been in normal circumstances. Price suppression is determined by comparing
selling prices with costs to assess whether the price increases are commensurate
with the increase in costs. This is seen in light of the landed value of the imports of
the subject goods. Therefore,the Authority considers whether the effect of dumped
imports is to depress prices orto prevent price increases.

11.7.25. Another way of analyzing the price suppression or depression could
be by determining the trends in operating cost to sales ratio over the injury
period. The operating cost to sales ratio takes into account the cost incurred per
Rupee of sales. An increasing operating cost to sales ratio implies that the
producer had to incur a higher cost per Rupee of sales. In other words, it means
that the producer earned less revenue for every Rupee of the cost incurred.
Thus, an increase in the operating cost to sales ratio implies that the increase in
cost was more than the increase in selling price, implying price suppression.
Alternatively, it could mean that the reduction in the selling price was more than
that of the cost, indicating price depression. Thus, an increasing operating cost to
sales ratio may indicate that the prices of the DI have been either suppressed or
depressed.

11.7.26. Evaluation of prices: In those situations, where the interested parties
have contended steep decline or increase in selling/import prices, the analysis may
need to be done on a transaction wise basis. However, if then umber of transactions
is large, this analysis can be considered on monthy or quarterly basis. However, this
kind of analysis would be viable only if the PUC does not have a large number of
different product types having different costs and prices.

Evaluation of Economic Parameters

11.7.27. The Authority is required to undertake a systematic examination of various

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