Panela is unrefinded sugar and has a wonderful caramel flavor. Often compared to brown sugar, but where brown sugar is refined white sugar that has molasses added back to it to achieve its darker color, or panela often referred to as piloncillo is unrefined.
Brown sugar which looks like panela, is refined white sugar with some molasses added back in. It looks like panela sugar, but the similarities stop there. The process of making brown sugar still involves refining, whereas panela does not. Since panela has never had its molasses removed, it has a more complex caramel flavor than brown sugar.
Panela is popular as both a sweetener and a spice. Since it melts very easily when heated, it is easy to incorporate into beverages, baking and cooking. Replace white or brown sugar in baking, desserts and ice creams. Many Mexican recipes call for it, including beverages.
The solid block can be grated and then added to recipes. You can grate it with the large holes of a box grater to use in recipes that call for brown or regular sugar.