Bangkok: The market is currently inundated with coconuts intended for cooking, prompting the Commerce Ministry to collaborate with coconut milk factories to absorb an additional 2.5 million coconuts.
According to Thai News Agency, the Department of Internal Trade is urgently tackling the oversupply of coconuts following the discovery of a surplus exceeding 5 million coconuts in Prachuap Khiri Khan province. They are working with major coconut milk producers to boost their purchases by an additional 2.5 million coconuts within two weeks to quickly alleviate the surplus and stabilize prices, which have dropped due to the large influx of produce.
Mr. Jirawut Suwannach, Deputy Director-General of the Department of Internal Trade, disclosed after a meeting with coconut milk factory operators that the session concluded with a directive to swiftly absorb the substantial surplus of mature coconuts that have entered the market simultaneously, leading to an oversupply issue at collection points and a subsequent price decline, predominantly in Prachuap Khiri Khan where an unsold excess of no less than 5 million coconuts persists.
Thep Phadung Phrom Coconut Co., Ltd., the producer of Chaokoh brand coconut milk, and Warafood and Drink Co., Ltd., the producer of Warafood brand coconut milk, have agreed to elevate their coconut purchases from Prachuap Khiri Khan by an additional 2.5 million coconuts over two weeks, averaging about 180,000 coconuts daily, supplementing their usual combined daily purchase of roughly 300,000 coconuts. They have also amplified production capacity and are operating machinery on Sundays to expedite the reduction of excess produce.
The Deputy Director-General noted that this situation arose because in 2026, the total coconut production reached approximately 852,000 tons, marking a 2.4 percent increase from the previous year. The recent drought further delayed the entry of produce into the market, causing it to concentrate over the same period. Additionally, the coconuts were smaller in size, making them less appealing for the grated coconut market, resulting in a significant volume entering processing plants.
Nevertheless, factories face production capacity and order volume constraints, preventing them from purchasing all the produce, leading to unsold supplies in several areas. Beyond Prachuap Khiri Khan, unsold supplies also exist in Chumphon, Nakhon Si Thammarat, and Surat Thani provinces, totaling around 5 million fruits.
Currently, mature coconuts are priced at 6-7 baht per fruit, a decrease from previous periods due to supply surpassing factory demand and limitations in traceability and labor regulations concerning the use of monkeys for coconut harvesting, affecting exports to certain markets.
Mr. Jirawut mentioned that during periods of high domestic production, coconut milk factories significantly reduced coconut imports from abroad. Currently, import volumes have decreased by over 65% compared to the same period last year to accommodate domestic production and address the issue of unsold coconuts.
Mr. Kiattisak Theppadungporn, Managing Director of Theppadungporn Coconut Co., Ltd., stated that the company is prepared to increase coconut purchases from farmers and collectors, and will operate its machinery and maximize production capacity daily, including Sundays, to help absorb surplus production, diminish the issue of unsold produce, and mitigate the price impact on farmers.
The Deputy Director-General added that this measure to increase purchasing will help alleviate the amount of unsold produce in the short term, with expectations that coconut prices will gradually normalize within the next two months. This timeline coincides with the period when mature coconut production will begin to decrease or enter a "shortage" phase, leading to less produce entering the market.
The Department of Internal Trade and provincial commerce offices will closely monitor the price and purchasing situation, and promote GAP (Good Agricultural Practices) certified farms to enhance opportunities for produce collectors to supply coconuts to processing plants, aiding the long-term balance of the coconut marketing system.