Yes, brown sugar will caramelize, but the one time I tried it I found it sort of harrowing and quite unlike white sugar. (It turned very goopy, at which point I thought all was lost. Then it finally dissolved!) It was, however, tasty in a pineapple upside down cake.
Brown sugar will caramelize, but it's not quite like white sugar. I've had good luck caramelizing raw sugar, but wouldn't advise going any darker than that. The molasses in the brown sugar will make it hard to monitor the color, plus may burn on you.
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