EXPORT SALES PRICES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A005400610006-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: December 4, 2007
• Sequence Number: 6
• Publication Date: December 3, 1954
• Content Type: REPORT

OUNTRY
UBJECI
LACE
ICQUIRED
IATE OF
NFO
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2
C W CAT {
A.PICY
East Gerrrlary
Export 32.1es Prices
DATE
NO OF LNCLs
(LtS'1'F! MOW;
SUPPLE:+M NT TO
REPORT NO.
25X1
"is OOCDWfIt 43NT11tIf 110MONS" Rf7[CUttQ TNR RATIRR41 OBPEt7SE
Or TMS OMITtO vt&TIS. W1"V% In MWIMA OP 71T{.S 14. slCTIOtfb 79N
AMM Tlb, ar ,Wt U. tf. COOL as AM1Me(1 t$T#A,NSOISSIO}1 OR RSYQI
ATtp* Of t"R COMTUOT9 TO oft RYQMPT RV AU UNAUTWOMIZ$R P113OW
THIS IS UNEVALUATED MFORMATiON
I., East Germanexport sales prices for products sold, to neri-Soviet Bloc countries
are not necessarily indicative of the manufacturing costs of the product,
While these latter costs are included in the crlculations tht, factor of
competitive prices for the same product on. the world ars4 rko t ire .ion:-So;iet
Bloc countries is used to determine the export sales p:?ice:, In ,srt.x?e.s
terms, the export sales price is determined ?s.s follows
ao The manufacturer of a product for export inform 3 '1. ;.e? ;?~ orgari aiion
handling the export order of the manufacturing cos'..s., 't'h'is irzclM,(6es all
expenses involved in the manufacture o ' the tyro duos-; 71r t- : )1A add,3
prescribed profit quotas and the coat of shi.,)pi;sg ;ho; product 1 o an export
harbor or station from which the product wou' d normal, ly leave the
country.
b0 Sales representatives in non??Gommani.st Bloc, oouatr .en ccnctant?y submit
quotations of sales prices of products exported by other countries:,
These sales prices from competitors are use t-j es'cablish a maximum sales
price for the East German product which ca7,. com.pet:i ff~vorabi.y With the
sales prices offered by other countries, is there estakiish
ed between the total DUE costs, including u sa.ti;aFactery profit and the
optimum sales prices developed to compete trr the world ma:rket~. This
relationship is expressed by a coefficients by which the DME sales price
is multiplied in order to find the export bales price expressed in foreign
currencyn
c. The following is a hypothetical exampled I certain type of radio receivre-,,;,
Type "A",., costs 150 DME to manufacture, pack, and ship to z potential
customer country. A similar radio, built ly a carnaeting couirtr sel s ETA
the same potential customer country for the equiv '.e' t of X50-O0: Th. s
shows a ratio of 150 DID to $50 and canoe oxpr.eased by the coefficient
333- Other radio receivers show a similar relationship between competing
sales price and East German coat, iiowe ver, the ; ast German cost is ~tt r .i eal
by a slightly lower eoerzieient in or" r to arrive at i saps mice in thy: cuss
tourer c:otrntrv
CLtSS`r1CATION
?y __--
3TI~ ASE #-t-'t , ~ !,Vy I x I NSRS
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2
rNO. OF PAG[.S 2
 Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2
 Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2
..~2~
that will be somewhat lower than the -or: ce of ompetin .:'. In the
or 2 Therefo-e. ~,. radio
~nst cry such . rj.Z.~,Gr4_
co'
"` ah YL ba ` 'r to px oduuoe, ship,,, and sell is s.o].& for e.eoul.
.;. s O or $ ig 5a ` This,, of c c : ~ se t. is out of ~l1 proportion to the
D.,
'price of the r .dio if free Sao a,e.::r market conversions Were used, 150
on the West Berl- L.-, e xvhanro is or'th appr oximatei
which equals' appproxi ate ly $ . 93
d These conversion ooefficionts are preptr'ed to 4,t .Y.ea sc four ae a.m '
places;, It has been observed:, howeve.^,, that the Conversion r,ceffioien-a
from DMA to U-ST v::rrency fluat;A: tes between -3 and 3 ti' ? a, hi,ney
exported by, .DI%-Invest:_.Export, depending upon the, Country and the spec:~f ,;.
type of proou,t. The coeff.c:Len app: 2.c b .o to DBE arid, pounds erl ing
conversion 'oarles : ro:'.`a ..25 to .- i `.;'h,3 latter fafi for eL;ldon ;4t~E ti that
lows, however,-
2, It happeric at times that the East C,e aaa :,: orn ei t cis-?rees that . (~?ex v .?.n
product be sold at less than Cost for v'ar--U)tis reasons:; such as prest:7"s?,e,
desire to dam Ce the ;industry or e ononEr of a. conpeta f or ;? ountr y ., or ae-ed
to acquire hard-=currency fore en lcredits .
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610006-2