Palm Sugar and coconut sugar are two different types of sugars used in southeast Asia and can also be found here in North America as imported items. Both are natural sweeteners that come from trees: coconut sugar comes from the buds of coconut tree flowers, while palm sugar is made from the sap of sugar palm tree (also called date palm). Both are collected as sap, and, like North American maple syrup, the sap is then boiled in enormous vats to create either a sugar paste (sold in jars or tins) or rock-like chunks of sugar (see my photos on this page) also known as 'jaggery' (note that jaggery can be made from cane sugar as well - it just means the solid, rock-form of sugar).
You will find these sugars are not as sickly sweet as refined white sugars (so if using them for cakes or other desserts, you may need to add more to achieve the same level of sweetness). However, I find they have a nice caramel-like taste which is similar to natural molasses, but lighter. You'll definitely enjoy the taste!
Both coconut sugar and palm sugar are created and sold in most Southeast-Asian countries, including Thailand. You can purchase imported coconut sugar or palm sugar in either the soft paste form or rock form in North American Asian stores (the rock type comes in a plastic package, so you'll be able to see these "cakes" quite clearly - see photo).
When Purchasing These Sugars
Keep in mind that the names palm sugar and coconut sugar are often used interchangeably, even on package labels. That's why it's best, if you are looking for a specific type, to go by the ingredients on the package rather than the title on the label. Aside from Asian stores, you may also be able to find these sugars at many health food stores or gourmet food stores.
The health benefits of using these unrefined sugars are only beginning to become known. The greatest benefit so far is their low glycemic index (around 35), which means they don't have the blood-sugar spiking effect ('sugar high') that regular refined sugar causes. They are similar to agave syrup in this way, except better in the sense that they don't contain high amounts of fructose. In India, palm sugar (in the rock-sugar jaggery form) is actually used in traditional medicine, since it contains many minerals and has been found to heal throat and lung infections.
How to Use these Sugars
The paste-like form of these sugars is easy to use (similar to honey) - just add it as you would regular sugar to any dessert you might be making (taste-test as you go to make sure you've added enough).
The hard cake-like form (pictured here) is more challenging to use. You can either pound it or process it into a brown-sugar-like powder (see my second picture), or you can melt it with a little water in a saucepan to create a syrup-like liquid.
The resulting taste is like a caramel-flavored brown sugar, but lighter, without any aftertaste (personally, I prefer palm or coconut sugar to any other low-glycemic index sugar substitute for this reason).
In Thailand, you can find fresh palm nectar sold at roadside and market stalls (the Thais call it "palm water"). If you're in Thailand, try it - it's delicious.