This is an excerpt from a page on the Diabetes UK website...
...consistent high blood glucose levels can lead to a condition called diabetic ketoacidosis (DKA). This happens because of a lack of glucose entering the cells where it can be used as energy. The body begins to use stores of fat as an alternative source of energy, and this in turn produces an acidic by-product known as ketones.
Ketones are very harmful and the body will immediately try to get rid of them by excreting them in urine. Consequently, when ketones are present and blood glucose levels are rising, people often become increasingly thirsty as the body tries to flush them out. If the level of ketones in the body continues to rise, ketoacidosis develops (ketoacidosis means acidity of the blood, due to an excess of ketones in the body).......As the level of ketones rise, it may be possible to smell them on the breath - often described as smelling like pear drops or nail varnish.
The body using stores of fat for energy will contribute to weight loss in diabetics.