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Coconut Sugar — A Healthy Sugar Alternative or a Big, Fat Lie? The harmful effects of added sugar are becoming increasingly more evident. As a result, people are turning to natural alternatives. A sweetener that has become very popular in the past few years is coconut sugar. This sugar is derived from the coconut palm tree and touted as being more nutritious and lower on the glycemic index than sugar. This article separates the facts from the fiction to determine if coconut sugar is really a healthy sugar alternative. What Is Coconut Sugar and How Is It Made? 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: 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.