A senior Cane and Sugar Board official said that the board would hold a meeting later on Friday to resolve the dispute that has led to the blockade.

But trade sources said they believed it was very unlikely that the board could come up with an initial sugar cane price for the 1998/99 crushing season (November-May) at a much higher price than the 470 baht per tonne already offered.

Planters said they wanted the government to set the initial price at 630 baht per tonne.

Thousands of sugar cane planters on Wednesday blocked sugar mill warehouses to stop them moving sugar from the godowns to local market.

The blockade did not affect Quota B and Quota C sugar, which is for exports. The crushing also continued as normal.

It was not clear exactly how many mills were under siege by sugar cane planters. Industry sources said at least 30 out of 46 mills were blocked by planters.

The move was sparked by planters' dissatisfaction with the 1997/98 final sugar cane price and the initial 1998/99 price. The average final price was set at 710 baht a tonne while the average initial price was fixed at 470 baht per tonne.

"We are unhappy in particular about the initial price for this season," said Chaiwat Khamkankoon, head of the sugar cane planters' association in a northeastern province of Khon Kaen.

"The blockade will continue until the government comes up with appropriate cane prices. It must do something before the whole industry collapses," he said.

Planters suggested that the government consider floating local sugar prices which have been fixed at 12.00 baht a kg for white sugar and 13.00 baht for refined sugar for 17 years.

They complained they were at the mercy of the world market and said there was no cushion when the market was bad because domestic prices were fixed.

Industry minister Suwat Liptapanlop said this week that the government would rather use stop gap measures to help boost the cane prices instead of resorting to raising sugar prices -- a politically sensitive move.

The stop-gap measures would include using money from cane and sugar cane funds to shore up the prices, he said.

Another option was to remove the value added tax (VAT) burden from producers and pass it on to consumers.

"The move would free up around 1.8 billion baht a year which could be used to boost sugar cane prices. Sugar is the only commodity for which producers have to shoulder the VAT burden," said another planter in the western province of Kanchanaburi.