On 24 May 2024, the International Trade Administration Commission of South Africa (ITAC) called for comment on the proposed creation of a Rebate Item for palm oils and its fractions, refined, bleached, and deodorised, but not chemically modified, classifiable in tariff subheading 1511.90.90, for use in the manufacture of soaps and organic surface-active products and preparations, in the form of bars, cakes, moulded pieces or shapes. Comment is due by 21 June 2024.
The application was lodged by Unilever South Africa (Pty) Ltd who reasoned that:
- It faces challenges due to rising costs, inflation, and competition from cheaper imports.
- Furthermore, the company is altering its formulation for producing soap bars to support its strategy of sourcing sustainable materials to prevent harm to people and plants.
- This formulation utilises palm oil, which currently attracts a 10% ad valorem duty.
- A rebate of the duty on imported palm oil is therefore necessary to maintain local manufacturing and competitiveness in the domestic market.
- While alternatives like sunflower and soybean oils exist, they require additional processing, increasing costs and making them less competitive compared to palm oil.