Coconut sugar is also called coconut palm sugar. It's a natural sugar made from coconut palm sap, which is the sugary circulating fluid of the coconut plant. It is often confused with palm sugar, which is similar but made from a different type of palm tree. Coconut sugar is made in a natural 2-step process first time A cut is made on the flower of the coconut palm and the liquid sap is collected into containers. The sap is placed under heat until most of the water has evaporated. The end product is brown and granulated. Its color is similar to that of raw sugar, but the particle size is typically smaller or more variable