Coconut price crash in Thailand vs firm EU desiccated market

Farmgate coconut prices in Thailand have collapsed from pre‑pandemic highs near USD 0.55 to as low as USD 0.06 per fruit, deep below production costs and forcing growers to abandon harvesting. Oversupply, slow export growth, and a highly concentrated procurement chain dominated by a few export groups linked to Chinese capital are squeezing farmer margins. While fresh aromatic coconut prices in Thailand are under severe pressure, international desiccated and processed coconut markets into Europe remain relatively firm, creating a widening gap between upstream and downstream values. A gradual price recovery toward around USD 0.21 per fruit is possible by Q3 2026, but only if surplus supply is reduced and processing demand expands.

The current Thai coconut crisis is a textbook case of structural oversupply meeting fragile export demand. Production has surged—Thailand is now harvesting about 2 million coconuts daily, with young coconut supply up more than 55% in 2025—while exports have risen less than 10%, keeping large volumes trapped in the domestic chain. Farmgate prices have therefore slid from around USD 0.28 per fruit recently to spot levels as low as USD 0.06, and even USD 0.03 for lower‑grade fruit, levels that no longer cover basic costs of fertilizer, labor, and tree maintenance. Farmers report leaving fruit unharvested and even considering cutting trees, a sign of acute income stress that can have medium‑term supply consequences.

At the same time, a small cluster of exporters and procurement groups—many associated with Chinese investors—controls more than 80% of the aromatic coconut wholesale trade and sets buying prices in a very narrow band. Farmers are selling coconuts at only USD 0.06–0.14 per fruit, while export values reach USD 0.97–1.39 per fruit, highlighting a striking value‑chain imbalance. Government intervention via public purchasing at around USD 0.14 per fruit and investigations into procurement practices has so far only slowed, not reversed, the price slide: average farmgate prices fell from around USD 0.16 in December to USD 0.09 in February. With additional headwinds from fertilizer supply issues (linked to tensions around the Strait of Hormuz), weak external demand and logistics disruptions, the Thai coconut market is set to remain under pressure in the near term.

📈 Prices & Market Structure

Thai farmgate vs export and processed product prices

The core of the current coconut market imbalance lies in the extreme divergence between Thai farmgate prices and export/processed product prices. In Thailand, farmers report:

• Pre‑pandemic levels: ~USD 0.55 per fruit
• Recent levels: ~USD 0.28 per fruit
• Current spot lows: USD 0.06 per fruit, with low‑quality fruit at USD 0.03

These prices are widely described as being below production cost, which explains why some growers leave fruit on the trees rather than pay for harvest and transport.

By contrast, industry sources indicate that export prices for Thai aromatic coconuts are still around USD 0.97–1.39 per fruit. The capture of most of this margin by a small group of procurement and export companies, particularly those linked to Chinese investors, has become a central political and economic issue. Farmers selling at USD 0.06–0.14 see little benefit from the international price level, despite Thailand’s strong brand in the nam hom (aromatic) coconut segment.

Desiccated and value‑added coconut prices (converted to EUR)

While Thai fresh coconut farmers struggle, prices for desiccated and dried coconut delivered into Europe are much firmer, reflecting a different balance in processed product markets. Based on the provided offers (all converted and quoted in EUR):

Product	Origin	Location / Terms	Latest Price (EUR/kg)	Weekly Change	Market Sentiment
Coconut dried, flakes (conventional)	Vietnam	Hanoi, FOB	4.65	0.00 (stable vs mid‑Feb–mid‑Mar)	Firm, tight nearby
Coconut dried, flakes (conventional)	Philippines	Dordrecht, FCA	2.70	0.00	Balanced
Coconut dried, flakes (organic)	Philippines	Dordrecht, FCA	3.10	0.00	Steady, niche demand
Desiccated coconut, medium grade	Indonesia	Dordrecht, FCA	1.95	0.00	Soft but supported
Desiccated coconut	Indonesia	Dordrecht, FCA	2.00	0.00	Stable

These offers have been unchanged across the last four reporting dates (from 20 February to 13 March 2026), pointing to a short‑term price plateau in the European desiccated coconut market. International industry data for 2025 also indicate that global desiccated coconut prices rose sharply through 2024–2025 and then stabilized at elevated levels, especially for FOB Indonesia and Philippines shipments, which underpins these relatively firm EUR‑denominated values.

🌍 Supply & Demand Balance

Thailand: structural oversupply and export dependency

The Raw Text makes clear that Thailand’s coconut sector is facing a structural oversupply problem. Production has increased strongly in recent years, with current output estimated at around 2 million coconuts per day. In 2025, supply is reported to have risen by more than 55% for young coconuts, driven by expanded plantings and better yields.

However, export performance has lagged: export volumes increased only about 9.7%, while export value reached roughly USD 200 million. This mismatch means a large surplus remains in domestic channels, depressing farmgate prices. Thailand’s nam hom segment is heavily reliant on exports to China, with more than 80% of wholesale trade reportedly controlled by external players, which amplifies the vulnerability to shifts in Chinese demand and policy.

Recent external data confirm that China’s import demand for edible coconuts from Thailand has slowed and diversified toward competitors such as Vietnam and Indonesia. Chinese imports of young coconuts (HS 080112/080119) declined markedly in value and volume in 2024, with Thailand’s share of Chinese imports falling from over 75% in 2023 to around 62% in the last twelve‑month period to end‑2024. This erosion of market share, combined with a fixed or only slowly growing Chinese market, exacerbates the Thai oversupply.

Global processed coconut: firm but increasingly diversified

Globally, coconut supply remains ample, with world production at over 62 million tonnes in 2022 and stable to slightly lower in 2023–2024. However, the balance between fresh and processed utilization differs sharply by region. For desiccated coconut, 2025 data show that both the Philippines and Indonesia saw lower export volumes but higher total export values, indicating higher average export prices.

Major import regions like the EU and US increased their import value, while volumes were more mixed, reflecting strong pricing power for exporters of desiccated coconut. Germany, for example, is sourcing nearly 88% of its desiccated coconut value from Indonesia, Philippines and Sri Lanka, underlining the heavy concentration of supply risk on a few origins. This pattern supports the stable to firm EUR prices observed for desiccated product in Europe, even as Thai fresh coconut prices collapse.

Competing suppliers and market substitution

Thailand’s difficulties are being amplified by aggressive expansion from neighboring suppliers. Indonesian exports of fresh and processed coconuts to China and Europe have been rising, and by 2025 Indonesian desiccated coconut FOB prices had climbed to around USD 2,800 per tonne, roughly double 2023 levels. Vietnam has also rapidly expanded shipments of fresh and processed coconuts to China, capturing share at Thailand’s expense.

In processed markets, however, Thailand is less dominant, with Europe particularly reliant on Philippines and Indonesia for desiccated coconut and coconut oil. This diversification means that while Thai farmers suffer, European buyers have alternative origins and see less price disruption. Yet the global supply increase in fresh coconuts, especially in Southeast Asia, could eventually weigh on desiccated prices if processing capacity expands too quickly or if demand growth slows.

📊 Fundamentals & Cost Structure

Farm economics under stress

The Raw Text states explicitly that current Thai farmgate prices are below production cost. While exact cost figures vary by region and farm size, costs typically include fertilizers, pesticides, irrigation, labor (including skilled climbers), and transport. Fertilizer supply disruptions linked to tensions around the Strait of Hormuz add further upward pressure on input costs, precisely when output prices have collapsed.

This cost‑price squeeze means that marginal and indebted farmers are particularly vulnerable. Some are leaving coconuts unharvested once prices fall below the marginal cost of picking and hauling, effectively reducing marketed supply in the very short term but not enough to rebalance the market. Others are considering cutting down coconut trees in favor of alternative crops, which, if implemented at scale, would tighten supply over the medium term (3–5 years) and could set the stage for a future price rebound.

Value‑chain concentration and margin capture

A key structural feature of the Thai coconut market is the high degree of concentration in procurement and export channels. According to the Raw Text, more than 80% of wholesale trade in the aromatic coconut segment is controlled by external players, many linked to Chinese capital. These players coordinate purchase prices within a narrow band and capture a large share of the value between farmgate and export FOB.

With farmers selling at USD 0.06–0.14 per fruit and exporters realizing USD 0.97–1.39 per fruit, the difference is only partially explained by handling, packaging, logistics, and quality‑sorting costs. The rest reflects strong buyer power and limited competition for farmgate supply. Recent Thai media and political debates echo these concerns, pointing to informal collusion among intermediaries and calling for enforcement against illegal middlemen and anti‑competitive behavior.

Policy response and its limitations

The Thai government has stepped in to purchase coconuts at around USD 0.14 per fruit to provide a price floor, while also launching investigations into procurement practices. However, these interventions are limited in scale relative to the daily output of around 2 million fruits. Reported government purchasing of 1–2 million fruits in some schemes is small compared to accumulated surpluses.

As a result, average prices continued to fall from around USD 0.16 per fruit in December to roughly USD 0.09 in February. Without structural solutions—such as diversifying export markets beyond China, boosting domestic processing, and tackling supply‑chain concentration—policy support risks functioning only as a temporary palliative. The Raw Text’s forward view, projecting only a gradual recovery toward around USD 0.21 per fruit by Q3 2026, is consistent with this constrained policy effectiveness.

🌦️ Weather Outlook for Key Growing Regions (Focus: India, Region IN)

Kerala and peninsular India: Early‑summer heat and moisture stress risk

India is a major coconut producer, with key belts in Kerala, Karnataka, Tamil Nadu and Andhra Pradesh. While the Raw Text focuses on Thailand, Indian weather is critical for regional supply and price dynamics. Kerala’s climate is typically humid‑tropical with heavy monsoon rainfall and high annual humidity. However, March–April is usually the hottest pre‑monsoon period, with increasing heat and evaporative demand.

Recent advisories and local reports for early 2026 indicate rising temperatures and heat warnings across Kerala ahead of the formal summer onset, with high humidity and elevated UV index. Earlier agrometeorological bulletins for January 2026 projected normal rainfall but already recommended mulching around coconut basins to conserve soil moisture and protect root zones, anticipating drier, hotter weeks ahead. This combination suggests increased moisture stress for coconut palms in poorly managed or rain‑fed areas through late March and April.

Implications for yields and supply

Coconut palms are relatively resilient to short‑term heat but sensitive to prolonged moisture deficits and salinity stress. For Kerala and other Indian belts, high pre‑monsoon temperatures can reduce nut set and kernel weight if not offset by irrigation or soil moisture conservation. The need for mulching and water management indicated in advisory bulletins underscores the risk of marginal yield impacts for the 2026/27 harvest cycle if heat episodes are extended.

From a regional price perspective, any material weather‑related yield shortfall in India would tend to tighten domestic coconut and coconut oil availability, particularly in a context where Kerala already experiences high inflation partly driven by coconut oil prices. However, given current global oversupply from Southeast Asia, only a significant Indian crop issue would be likely to offset the Thai surplus in the next 6–12 months.

🌐 Global Production, Trade & Stocks

Major producers and exporters

According to FAO and related datasets, the Philippines, Indonesia, India and Sri Lanka remain the top coconut producers, with Thailand, Vietnam and a number of Pacific and Latin American countries as important secondary players. Global production in 2022 stood at roughly 62.4 million tonnes and has been broadly flat in recent years. Within this total, the share of coconuts entering industrial processing (desiccated coconut, coconut oil, coconut water) has been rising.

Trade statistics for desiccated coconut in 2025 show that the Philippines and Indonesia dominate export volumes to the EU and US, while Sri Lanka holds a strong niche position. Indonesia has recently overtaken some competitors in key markets such as Germany, where it now accounts for over one‑third of desiccated coconut import value. These shifts increase competition for Thailand’s processed exports but also provide diversification options for buyers.

China’s changing role as a demand driver

China has been the single most important driver of demand for fresh aromatic (young) coconuts in the last decade, with Thailand historically capturing the bulk of this trade. However, the latest data show that China’s imports of edible coconuts have contracted in both volume and value in 2024, and Thailand’s share of these imports has fallen as Vietnam and Indonesia gain ground.

This shift is particularly damaging for Thailand because its nam hom segment is heavily export‑dependent and concentrated on the Chinese market. With Vietnamese and Indonesian suppliers offering competitive prices and logistics, Thailand faces a structural need to diversify buyers or upgrade its value proposition (e.g. branding, GI protection, higher quality). Recent EU geographical indication status for some Thai aromatic coconut products may help in the longer term, but this will not quickly absorb the current surplus that is depressing farmgate prices.

📉 Market Drivers & Sentiment

Key bearish drivers (near term)

• Oversupply in Thailand: More than 55% increase in young coconut supply in 2025 vs only 9.7% export volume growth leaves a sizable domestic surplus.
• Concentrated buyer power: Small groups of intermediaries and exporters coordinate farmgate prices, limiting pass‑through of export values to farmers and dampening supply adjustment.
• Weakness in Chinese demand: Contraction in China’s edible coconut imports and diversification toward Vietnamese and Indonesian origins reduce pull for Thai coconuts.
• Logistics and input headwinds: Fertilizer disruptions linked to the Strait of Hormuz and global shipping frictions increase costs and complicate export flows.

Supporting / bullish elements (medium term)

• Below‑cost pricing: Current Thai farmgate prices (USD 0.03–0.06) are unsustainably low, likely triggering medium‑term supply contraction via under‑maintenance and tree removal.
• Firm processed product prices: Desiccated coconut and other processed forms remain relatively high and stable in EUR terms, indicating robust demand and margin space to support higher fresh nut prices over time.
• Policy and branding initiatives: Government purchases and GI registrations (e.g., Ratchaburi aromatic coconut in the EU) could slowly support better differentiation and price realization for premium segments.

📆 Outlook & Price Scenarios

Thai farmgate coconuts (2026)

Based on the Raw Text and corroborated market signals, the Thai coconut market is likely to remain under pressure through at least mid‑2026. Persistent oversupply, slow demand growth, and path‑dependent buyer structures will keep prices low, although ultra‑low levels of USD 0.03–0.06 per fruit are unlikely to be sustainable for long.

The Raw Text projects a gradual recovery toward around USD 0.21 per fruit by Q3 2026, contingent on effective surplus reduction and increased processing demand. This implies a staged adjustment where government interventions, some attrition of unprofitable supply, and modest demand gains from diversified markets begin to lift the floor. However, without significant structural reforms in procurement and export market diversification, a return to pre‑pandemic levels near USD 0.55 per fruit appears improbable in the medium term.

Desiccated & dried coconut into Europe (2026)

The provided offer data show flat prices across late February to mid‑March 2026, and international data for 2025 point to a market that has already repriced higher and is now consolidating. Under current assumptions of steady demand from confectionery, bakery and plant‑based product segments in Europe, prices in EUR are likely to remain broadly stable with a mild upward bias for premium and organic grades.

Potential downside risks include a sharper‑than‑expected slowdown in European consumer spending or increased competition from other plant‑based fats and fibers. Upside risks are mainly weather‑related supply shocks in key producers (Philippines, Indonesia, India) or logistical disruptions that tighten nearby availability. Overall, the desiccated market looks significantly healthier than the Thai fresh coconut sector.

📌 Trading Outlook & Recommendations

For industrial buyers (EU food manufacturers, traders)

• Consider locking in a portion of Q2–Q3 2026 needs at current EUR prices (2.00–4.65 EUR/kg, depending on origin and grade), which reflect a stable but historically elevated plateau rather than the lows of 2020–2021.
• Diversify origin exposure across Indonesia, Philippines and Vietnam to manage supply‑chain risk, given concentration in a few countries and potential weather volatility.
• Use the current Thai farmgate crisis as an opportunity to explore long‑term sourcing or investment in Thai processing, potentially securing favorable terms while contributing to more balanced value sharing.
• For organic and premium segments, maintain slightly higher safety stocks, as these markets are tighter and more exposed to supply shocks.

For exporters and processors in producing countries

• Thai processors should capitalize on low raw material costs to upgrade facilities and expand desiccated, coconut water and value‑added product lines aimed at diversified markets (EU, US, Middle East).
• Producers in Indonesia and the Philippines may consider gradual forward selling at current price levels, balancing the risk of any near‑term correction against still‑strong structural demand.
• Invest in sustainability and traceability certifications (organic, fair trade, GI) to capture premium segments, particularly in Northern and Western Europe where demand growth is strongest.

For policymakers and farmer organizations

• In Thailand, prioritize competition policy and contract transparency in the coconut chain to reduce excessive buyer power and improve farmer price transmission.
• Support processing capacity and market diversification through credit lines, technical assistance and export promotion into Europe and other high‑value markets, reducing over‑reliance on China.
• In India, use current weather advisories to strengthen farmer extension on irrigation, mulching and drought management in coconut belts to safeguard yields during pre‑monsoon heat episodes.

📆 3‑Day Regional Price Forecast (EUR)

The following short‑term outlook focuses on indicative EUR prices for desiccated and dried coconut delivered into Northwest Europe (e.g., Dutch ports), reflecting the stability seen in recent offers. Farmgate fruit prices in Thailand are not traded on formal exchanges and thus are discussed qualitatively rather than in tabular EUR terms.

Product	Region / Delivery	18 Mar 2026 (EUR/kg)	19 Mar 2026 (EUR/kg)	20 Mar 2026 (EUR/kg)	Short‑Term Trend
Coconut dried, flakes (PH, conventional)	NL, FCA	2.70	2.70	2.70	Sideways, stable offers
Coconut dried, flakes (PH, organic)	NL, FCA	3.10	3.10	3.10	Sideways, tight premium
Desiccated coconut (ID)	NL, FCA	2.00	2.00	2.00	Sideways, balanced
Desiccated coconut, medium (ID)	NL, FCA	1.95	1.95	1.95	Sideways
Coconut dried, flakes (VN)	Hanoi, FOB	4.65	4.65	4.65	Sideways at high level

Given the absence of new fundamental shocks in the last few weeks and stable offer indications, we expect desiccated and dried coconut prices in Europe to hold steady over the next three days. For Thai farmgate coconuts, prices are likely to remain depressed in local‑currency terms, with any upside limited to localized effects of government purchasing rather than a broad market shift.