National Logistics Agency confirms losses Rp 1.66b

JAKARTA (JP): Chief of the National Logistics Agency (Bulog) Beddu Amang confirmed auditors' findings yesterday that the agency lost more than Rp 1.66 billion (US$748,000) between 1993 and 1994 from the sales of rice and soymeal.

The Supreme Audit Agency (Bepeka) is the government agency that disclosed Bulog's marketing operation losses.

Bepeka's findings, as reported by the Kompas daily yesterday, showed that the losses were incurred because Bulog's Jakarta branch sold, on interest-free credit, 1,500 tons of rice worth Rp 900 million to businessman H. Hasan and 11,000 tons of soymeal valued at Rp 7.06 billion to three feedmills.

The auditors determined that since the rice and soymeal buyers did not pay interest on the six-month credit Bulog itself had to bear the interest costs.

Beddu argued that Bulog was forced to sell the rice and soymeal at that time to avoid bigger losses from keeping the commodities in storage.

"At that time (1993-1994) the rice market was depressed while Bulog held a large volume of rice stocks and the farmers enjoyed a bumper harvest," he said in defending Bulog's decision to sell the 1,500 tons of rice on interest-free credit.

He added that the agency was also forced to reduce its soymeal stocks at that time because several feedmills were licensed by the finance ministry to import soymeal duty free.

"Since the three major feedmills, PT Charoen Pokphand, PT Japfa Comfeed and PT Metro Inti Sejahtera, were our biggest customers, they did not want to buy from us unless they were given lenient terms of payment or interest-free credit," Beddu said.

The buyers of the soymeal on interest-free credit were PT Charon Pokphand and PT Kerta Mulia Sejahtera.

He said Bulog had explained to Bepeka the reasons behind the sales on interest-free credit.

Beddu also confirmed another Bepeka finding, which showed that between 1993 and 1994 Bulog also suffered Rp 954.6 million in losses from the sales of 10,025 tons of rice way below the prevailing market prices.

Again he contended that the rice sales were made by Bulog to avoid bigger losses which could have resulted from prolonged storage in Bulog's warehouses.

The audit showed that the 25,965 tons of rice which were sold by Bulog below the prevailing market prices were derived from old stocks imported from Thailand in 1992. (vin)