Make no mistake Niacin has been shown to raise the blood sugars of diabetics. Here is what I posted on another forum on this topic:
I have to give you some caution on the use of niacin in large quantities for raising HDL in diabetics. What I found was the basic studies were done by the infamous Scott Grundy, an leading character in the cholesterol mafia. His first study indicated that niacin raised blood sugars for diabetics, but he redid the study and although he had somewhat of a disaster of results, he still declared it safe for diabetics. You can find that article here (http://www.ncbi.nlm.nih.gov/pubmed/12123399).
Here is what he found. In a controlled study, diabetics were given either no niacin, a 1000 mg/day or 1500 mg/day. Doctors were told to increase medication if needed to control blood sugar. Despite increased medication, the HbA1c of the diabetics degraded in a statistically significant and proportional way. Apparently some of the patients had to go on insulin during the trial. And this study concluded that the medication was safe for diabetics. You can make your own conclusions.