Thai coconut prices plunge to US$0.06 as oversupply, export bottlenecks squeeze farmers

THAILAND – Coconut prices in Thailand have collapsed to as low as 2 baht (US$0.06) per fruit, forcing growers in key producing regions to leave harvests uncollected as market rates fall below production costs.

This price crash stems from a compound crisis of oversupply and concentrated export control. Thailand’s coconut production has surged to approximately two million fruits daily, with 2025 supply increasing by over 55% while export volumes rose only 9.7%.

The resulting glut has overwhelmed a procurement system where six or seven companies predominantly linked to Chinese investors control purchasing and exports to China.

Industry sources indicate these dominant players purchase from farmers at 2 to 5 baht (US$0.06 – 0.14) while exporting at 35 to 50 baht (US$0.97- 1.39) per fruit, capturing significant margins that bypass local producers.

In addition, over 80% of wholesale trade now operates under external capital, marginalizing traditional intermediaries and leaving growers with limited negotiating power.

As a result, these depressed Thai coconut prices present immediate procurement opportunities. Hotels, juice bars, and restaurant chains sourcing coconut water, milk, or desiccated products could negotiate favorable short-term contracts.

However, the investment risk of Chinese-dominated supply chains lies in opaque pricing structures and potential prioritization of China-bound volumes during demand spikes, which could leave buyers facing allocation shortages.

Additionally, external pressures compound local instability. Global shipping disruptions, particularly those affecting the Strait of Hormuz, have constrained fertilizer availability, impacting input costs for Thai growers.

These logistical bottlenecks create ripple effects: when maritime routes face instability, fertilizer prices rise, production costs increase, and farmers already operating at a loss face further margin compression.

Consequently, global coconut prices remain volatile, influenced as much by Middle East shipping lanes as by Southeast Asian harvests.

The Thai government has initiated purchasing at 5 baht (US$0.14) per fruit and launched investigations into purchasing centers, yet average February prices lingered at 3.20 baht (US$0.09) well below December’s 5.75 baht (US$0.16).

According to industry analysis, sustainable recovery requires reducing surplus volumes and investing in downstream processing to absorb excess supply. A target of 7.5 baht (US$0.21) per coconut by the third quarter of 2026 remains contingent on these structural adjustments.

For investors, the crisis underscores both opportunity and caution. While immediate sourcing advantages exist, long-term engagement with Thailand’s coconut sector demands scrutiny of supply chain concentration and resilience planning against global shipping disruptions that increasingly dictate agricultural commodity flows.

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