Piloncillo is an unrefined Mexican sugar that is made from cane sugar made from boiling and evaporating cane juice. Piloncillo is the most common name for this type of sugar in Mexico, but the is also known as panocha or panela in other Latin and Central American countries. It can be found pressed into blocks or rounds, as well as cones, at Mexican markets. This form is very easy to store and transport, so it is also quite inexpensive.
Piloncillo is very hard and you will need to break it up before you use it. I have heard of people attacking large pieces of piloncillo with a hammer and chisel, but that should only be necessary if you are working with an extremely large piece and need to break it down to a more manageable size. Most of the pieces that you can buy at a Mexican market or specialty store are already shaped into pieces that will fit in your hand. The easiest way to break them down is by grating them. A large cheese grater is an easy tool to quickly break the sugar down into a form that is similar to regular brown sugar. A microplane can be used to produce a super fine sugar. And if you are stirring it into a hot pot of coffee or hot chocolate, you can simply chop it (carefully) with a knife into small chunks the size of sugar cubes and stir them in. Piloncillo melts easily when you add a little heat.
The flavor is somewhere between honey and molasses, though there are some darker versions of piloncillo that will have a stronger molasses flavor. It can be substituted into recipes that use brown sugar, though piloncillo fans will say that you can’t quite capture the flavor of the piloncillo if you decided to substitute brown sugar in place of it in a recipe.