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This paper seeks to identify and estimate the comparative advantages of the Khyber Pukhtunkhwa of Pakistan in sugar manufacturing over other parts of the country. The study shows that the Domestic Resource Cost, Nominal Protection Coefficient, and the cost of sugarcane for the cane sugar production of the Khyber Pukhtunkhwa are lower than that in the Punjab and Sindh Provinces�. The sugar industry in the Khyber Pukhtunkhwa is unique in a sense that this is the only province of the country where both sugarcane and sugar beet are cultivated and processed in the same Sugar Mills. As a result the overhead cost per unit of sugar out put is reduced which increases the profit margin of the sugar producer. Cultivation of sugar beet has not only benefited growers, who can use their land to grow sugarcane in a given year or sugar beet with other Kharif crops and get the benefits of these harvesting but also the sugar producers, who utilize their installed capacity for cane sugar production in winter and beet sugar production in summer. The encouragement of sugar manufacturing in the Khyber Pukhtunkhwa would be helpful for all the concerned and will also help in the increase in the supply of sugar and government revenue.
