Commerce Ministry steps in to rescue coconut farmers as prices plunge

The Ministry of Commerce is rolling out urgent intervention measures to shore up falling coconut prices, as oversupply and drought-induced low-quality yields trigger market bottleneck.

Goranij Nonejuie, spokesperson for the Ministry of Commerce, said yesterday that the domestic coconut market is facing significant pressure as an influx of seasonal produce hits the market.

The Office of Agricultural Economics has projected total coconut output for 2026 to reach 852,000 tonnes, marking a 2.4% increase from the previous year.

Compounding the oversupply, a prolonged dry spell has left much of the current harvest undersized. These small coconuts have been rejected by the traditional grated-coconut market, forcing farmers to divert their crops directly to processing factories.

Processing plants have, however, struggled with capacity constraints, leading to a massive backlog of unpurchased coconuts. Consequently, middlemen and processing facilities have slowed down purchases, dragging farm-gate prices down to just 6-7 baht per nut.

Addressing farmers’ concerns, that cheap imports are to blame for the price collapse, Goranij explained that local processing plants rely overwhelmingly on domestic supplies, which account for 80% of their raw materials.

Coconut imports between January and May 2026 stood at 79,388 tonnes, a sharp 60% decline compared to the 190,734 tonnes imported during the same period last year.

To alleviate the financial strain on growers, the Department of Internal Trade (DIT) and the Department of Foreign Trade (DFT) have hammered out a relief plan, in collaboration with coconut milk manufacturers.

Under the agreement, factories have agreed urgently to absorb 8.8 million nuts currently backlogged in major growing regions. This includes 5 million nuts from Prachuap Khiri Khan, 1.6 million from Nakhon Si Thammarat, 1 million from Surat Thani and Chumphon and 1.2 million from other provinces.

The DFT has asked importers and coconut milk processors to defer scheduled imports temporarily and strictly to prioritise domestic produce.

Goranij expressed confidence that these immediate measures would clear the supply glut and help prices gradually stabilise.

He added that the ministry will closely monitor purchasing activities and strictly regulate imports to ensure they do not harm local farmers.

Over the long term, the ministry aims to strengthen the global competitiveness of Thai coconut exporters by helping local farmers, cooperatives and community enterprises to upgrade their production to international standards, ensure a steady year-round supply and implement comprehensive traceability systems.