Unilever South Africa (Pty) Ltd, applied for a rebate facility on palm oil, which is used in the manufacture of cooking oils, soaps and organic surface-active products and preparations, in the form of bars, cakes, moulded pieces or shapes. They also constitute a significant portion, nearly 36%, of the world’s vegetable oil supply.

The Commission found that:

• Indonesia and Malaysia dominate production, contributing over 80% of the 78 million tonnes produced globally in 2022/23, with further growth anticipated.
• The SACU region, including South Africa, relies entirely on imports due to unsuitable agronomic conditions for palm oil cultivation but produces other vegetable oils, such as sunflower and soybean oils.
• In terms of soap bar imports, it was found that there was a notable surge in the importation of laundry soap in 2020, marked by a substantial increase of 126.6%. This surge was largely attributed to the onset of the COVID-19 pandemic, which heightened the demand for soap products as a crucial measure for maintaining hygiene and preventing the spread of the virus.
• The Applicant’s projected costs for the new formulation of the product are expected to increase due to higher costs for imported materials.

In light of the above, The Commission decided to recommend the creation of a rebate facility on palm oil, not fractionated, refined, bleached and deodorised, but not chemically modified, classifiable in tariff subheading 1511.90.90.

A rebate facility provides a duty waiver for domestic industries not to pay full or partial customs duties on a specific product. It allows for sourcing of inputs at world competitive prices and promotes competitive pricing in the local and export markets.

Please refer to Report 738 for full details.