Thai Ministry to Confront 20 Firms Over Coconut Price Crisis
The Ministry of Commerce targets March 12 for emergency talks to curb "unfair" price-gouging by foreign middlemen and promote high-value organic exports
- Thailand's Ministry of Commerce is holding an emergency meeting on March 12 with 20 major firms to address the falling prices of aromatic coconuts.
- The price crisis is attributed to foreign-owned middlemen, particularly Chinese-backed "nominee" businesses, who are accused of deliberately suppressing prices paid to local farmers.
- In response, the ministry will audit businesses suspected of illegal nominee activity and is promoting a long-term strategy to shift focus to high-value organic exports.
The Ministry of Commerce targets March 12 for emergency talks to curb "unfair" price-gouging by foreign middlemen and promote high-value organic exports.
The Ministry of Commerce is set to convene an emergency summit with 20 major agricultural purchasing firms on 12 March. The move aims to tackle the sharp decline in aromatic coconut (Nam Hom) prices and address growing concerns regarding the "unfair" influence of foreign-owned middlemen.
The discussions will primarily target the "Lhong" (middlemen) system, particularly those operated by Chinese entities.
These intermediaries are accused of aggressively suppressing the prices paid to local farmers, threatening the livelihoods of growers across the kingdom’s primary coconut-producing regions.
Strategic Shift to High-Value Exports
Beyond immediate price intervention, the Department of Business Development (DBD) is pivoting towards long-term sustainability.
Poonpong Naiyanapakorn, director-general of the DBD, recently led a delegation to Samut Sakhon to consult with industry leaders on adding value to the supply chain.
"The department is studying business models that shift the focus from raw fruit sales to high-value processing," Poonpong stated. "By transitioning to certified organic products for the European and American markets, we can insulate our farmers from the volatility of the fresh fruit trade."
During a visit to the Harmless Harvest (Thailand) facility—a major exporter that sends 100% of its production to the United States—officials inspected advanced microfiltration systems and environmental management protocols.
The Ministry intends to use such successful models as a blueprint for other agricultural sectors, such as durian and mangosteen.
The "Nominee" Problem
A significant portion of the crisis stems from the rise of "nominee" businesses—foreign entities using Thai names to bypass local regulations.
Narongsak Chuensuchon, chairman of the Federation of Thai Industries (Ratchaburi Chapter), warned that over 200 Chinese-backed middlemen are currently operating in the Ratchaburi, Nakhon Pathom, and Samut Sakhon belt.
These operators are allegedly devaluing premium-grade coconuts and refusing to purchase secondary-grade fruit, leaving farmers with limited market access.
In response, the Ministry has pledged to "Upskill and Reskill" local entrepreneurs in export logistics while strictly auditing any business suspected of illegal nominee activity.
Industry Standards
For premium exporters, the focus remains on quality over quantity.
Mathieu Chaumont, deputy managing director of Harmless Harvest, noted that while the company processes up to 600,000 nuts daily, they maintain a strict pricing structure based on weight to incentivise farmers.
Their rates currently range from 5 baht for smaller nuts to 9.5 baht for those weighing 1.7kg or more, provided they meet international organic standards.
The Ministry’s findings from the upcoming 12 March meeting will be used to draft a broader framework for managing agricultural price stability and protecting the domestic economy from external manipulation.
