Coconut sugar is a popular sweetener in many health based diets as it is plant based and processed to a minimal extent. Coconut sugar comes from the sap of the coconut palm tree which is more nutritious than table sugar. How is Coconut Sugar made: The flower of the coconut palm is cut and the liquid sap is collected and placed under heat until the moisture is evaporated.This results in the end product which is brown and granulated.