When the government of Indonesia decided to erase the monopoly of sugar by BULOG and applied 0 percent imported tariff for sugar in January 1998, the existence of local industry of sugar was threatened. The fact that imported sugar was cheaper than local sugar showed the inefficiency of local industry of sugar. This made many sugar factories nearly go bankrupt because they couldn't compete with the imported sugar. The government received a lot of protest against its decision to free the sugar market from monopoly and finally applied a 25 percent import tariff on sugar. This research shows that only the importers, the owners of sugar companies and the government enjoy the benefit of tariff but the consumers and the farmers don?t. This study is about demand and supply of sugar in Indonesia before the government applied the import tariff and after the tariff is applied. This shows that it's better for the government to erase the tariff to make the sugar industry more efficient.