Sugar market is one of the most protected markets for agricultural products world wide. In almost every sugar producing country the sugar market is regulated in some way. With an increasing liberalization of agricultural trade in the "Millennium Round" of the WTO trade negotiations, the question of international competitiveness is of increasing importance. Based on empirical studies, in this article the competitiveness of sugar production in the most important sugar producing countries is analysed, including the whole production process from beet or cane production in the field to sugar processing in the factory. Special emphasis is focussed on the different location factors and their influence on competitiveness, so that finally, conclusions can be drawn on future development of the world sugar market and the single production locations. From the countries included in this study, at present only Brazil, Australia, Thailand and partly South Africa would be able to produce sugar under world market conditions. While Brazil and Australia profit from favourable natural, economical and political location factors, in Germany high opportunity costs as well as high environmental and social standards predominate the advantages of high efficiency in the sugar industry. In the United States partly disadvantageous climatic conditions together with high opportunity costs are responsible for the insufficient international competitiveness of sugar production. Low productivity in Thailand and South Africa is overbalanced by low wages as well as comparatively low environmental and social standards. Without standardised environmental and social regulations, a liberalization of the world market would force movements of sugar production from beet to cane areas with favourable natural, economical and political conditions.