National Logistics Agency confirms losses Rp 1.66b

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)