Over the past few months, Thailand’s coconut sector has found itself at the center of a growing storm. According to a recent analysis by Thai media outlet The Standard, the core issue revolves around a dramatic collapse in farm-gate prices—plummeting from a high of 20–40 baht per coconut to just 2 baht—prompting urgent calls from the industry for government intervention.
However, the crisis extends far beyond price volatility. It has exposed deep systemic flaws in the industry’s pricing mechanisms, regulatory oversight, illicit buying stations, and the entire international trade chain. A critical vulnerability lies in the fact that over 80% of Thailand’s coconut exports are destined for a single market—China—leaving the industry with little capacity to cushion itself against market fluctuations.
Market Imbalance and Pricing Power
The analysis points out that with China serving as Thailand’s overwhelmingly dominant export market, pricing power has effectively fallen into the hands of the downstream end of the supply chain, rendering the Thai coconut market extremely fragile.
An industry insider explained that the price farmers receive is essentially determined by a reverse calculation based on prices in the overseas end-market. For instance, if the end-market demands a price of 10 baht per coconut, processors or exporters must work backward, deducting all costs for sorting, packaging, transportation, and farm procurement. The amount ultimately passed back to farmers can drop to just a few baht per coconut, or even the 2–4 baht range reported in the news.
Illegal Buying Stations and Supply Chain Distortion
Compounding the problem, some businesses with Chinese backing have established buying points in Thailand, acting as intermediaries while allegedly not fully complying with Thai laws. This has given rise to numerous “illegal buying stations” that are distorting the market by monopolizing supply chains. Some are even producing “fake coconut water” under the guise of using Thai coconuts.
Industry insiders revealed that some Chinese entrepreneurs have set up buying stations and coconut water processing facilities in Thailand. These operations reportedly import coconut cream原料 from Indonesia, processing it into concentrate, and then mixing it with coconut water or plain water to mimic the flavor of coconut. Others use cheaper coconut varieties not specified on product labels for juicing, or add other ingredients to create a flavor profile resembling that of aromatic (fragrant) coconuts, producing imitation coconut water beverages that are then exported to overseas markets like China.
Damage to Brand Reputation and Export Sector
Although Chinese authorities have since strengthened oversight and taken legal action against some problematic products, the situation has already severely impacted Thailand’s coconut industry chain, particularly the export sector.
Once these imitation products enter the Chinese market or supermarket shelves, consumers do not distinguish between producers. All are collectively labeled as “coconut water from Thailand,” tarnishing the brand image of the entire industry. If the end-market perceives that Thai products are frequently problematic, it could lead to stricter inspections or even import restrictions, further damaging the export sector.
Adding to the concern, current production techniques for imitation beverages are now sophisticated enough to make low-quality products taste nearly identical to genuine coconut water, making it difficult for ordinary consumers to differentiate without laboratory testing.
Calls for Government Action
Stakeholders within Thailand’s coconut industry chain believe the primary responsibility for solving the counterfeit coconut water issue lies with the government. Government agencies possess the necessary regulatory tools, including food production standards, product quality inspections, and consumer protection mechanisms. By combining legal measures with on-site factory inspections and random product testing, authorities can prevent adulteration at the source.
Government Response and Enforcement
In response, Thailand’s Ministry of Commerce recently launched an “Operation to Restore the Dignity of Thai Fragrant Coconuts.” Poonpong Naiyanapakorn, Director-General of the Department of Business Development, revealed after inspecting a fragrant coconut export factory in Ratchaburi Province that officials had been dispatched to systematically address the issue of low fragrant coconut prices.
Additionally, the Department of Business Development convened a special task force meeting to combat illegal business activities. The department announced it would investigate and crack down on the use of Thai nationals as nominees (fronts) to circumvent the Foreign Business Act.
The Department warned those facilitating such illegal activities and stressed that Thai nationals must not assist, support, or hold shares on behalf of foreign individuals seeking to circumvent or violate the law for business purposes. If violations are found, penalties will be strictly enforced, including imprisonment for up to three years, fines ranging from 100,000 to 1 million baht, or both. Failure to comply with court orders may result in additional daily fines of 10,000 to 50,000 baht until the violation ceases.
