Thailand’s Coconut Crisis: Chinese Investment and the Squeeze on Farmers
Samut Sakhon, Thailand – For decades, Thailand has been a leading exporter of coconuts, a staple ingredient in Southeast Asian cuisine and a growing favorite in China. However, a surge in Chinese investment in the Thai coconut industry is dramatically reshaping the market, leaving many small-scale farmers struggling to survive. Prices have plummeted to record lows, with farmers receiving as little as two baht (approximately six US cents) per coconut – less than the cost of a stick of chewing gum.
The Plight of Thai Coconut Farmers
Supon Haochareon, an 81-year-ancient coconut farmer in Samut Sakhon province, and his wife Lamduan, 74, exemplify the challenges facing Thai coconut growers. They tend to over 300 trees, but dwindling prices threaten their livelihood. “Before the pandemic prices were 20 baht a coconut,” Lamduan Haochareon explained. “But we’ve watched the price go from 10 to five baht and now it’s two baht. That’s not enough to buy fertiliser.”
The aromatic variety of coconut, known as nam hom, is particularly prized in China. Despite strong demand, farmers are seeing minimal returns, as intermediaries control pricing, and profits.
The Role of the ‘Lhong’ and Chinese Investment
The traditional Thai agricultural market system relies on lhong – wholesalers who collect produce from farms and set prices based on quality, volume, and customer orders at warehouse clearing centers. However, Chinese investors are increasingly dominating this supply chain, effectively controlling the market.
According to reports, Chinese businessmen are at the top of the supply chain, controlling Thailand’s US$6 billion fruit trade South China Morning Post.
Samut Sakhon: A Province at the Center of the Issue
Samut Sakhon province, located an hour west of Bangkok, is a key agricultural region in Thailand. It is known as “Mahachai” locally and is characterized by its fisheries, factories, and agricultural lands Wikipedia. The province’s economy is significant, with a GDP of baht 398 billion (US$13.1 billion) in 2019.
Samut Sakhon also provides healthcare services through Samut Sakhon Hospital, a 600-bed facility operated by the Ministry of Public Health, along with several other hospitals in the Mueang district Wikipedia.
Looking Ahead
The situation highlights the challenges faced by small-scale farmers in Thailand as they navigate increasing foreign investment and market control. The future of the Thai coconut industry, and the livelihoods of those who depend on it, remains uncertain as the balance of power shifts further up the supply chain.