No, you cannot substitute granulated sugar for powdered sugar directly.
However, you can make your own powdered sugar from granulated sugar using a BLENDER.
Run the granulated sugar through a BLENDER until it reaches the proper consistency. It is important to stir the sugar up from the bottom manually at least twice during the process to ensure all sugar is processed properly.
In doing this, however, you might find the end product to be slightly different in taste or consistency.
Things to consider when you substitute: powdered sugar is sugar of a very fine consistency mixed with a little cornstarch to prevent clumping. This makes it smoother for frosting mixes. It is the cornstarch that will make some uncooked things come out a little cloudy looking if you substitute, and would usually make cooked things a little thicker. You may detect the flavor difference imparted by the cornstarch in some things.
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