Inside the coconut cartel: how Chinese money squeezes Thai farmers
Thai coconut prices hit a record low of 2 baht (6¢), less than chewing gum, as Chinese capital controls the supply chain.
A South China Morning Post (SCMP) investigation exposes how Chinese capital has consolidated control over Thailand's lucrative coconut export industry, forming what local farmers describe as a 'coconut cartel.' Chinese investors have moved beyond simple export deals to acquire warehouses, processing plants, and distribution networks, effectively seizing the entire supply chain for the prized aromatic 'nam hom' coconut variety, which is a premium product in China. This vertical integration allows a small group of wholesalers, known as 'lhong,' to set monopsony prices at farm gates, leaving growers with no alternative buyers.
The financial impact on Thai farmers is devastating. Prices have collapsed from 20 baht per coconut before the pandemic to a historic low of just 2 baht (approximately 6 US cents)—less than the cost of a stick of chewing gum. For elderly farmers like 81-year-old Supon Haochareon and his 74-year-old wife, this price doesn't cover basic inputs like fertilizer, erasing any profit from their 300-tree farm. The cartel's pricing power, coupled with climate change reducing coconut size, has trapped a generation of aging farmers in perpetual labor with no viable path to retirement, highlighting the human cost of global agricultural consolidation.
- Chinese investors control the full supply chain for Thailand's premium 'nam hom' coconuts, creating a buyer's cartel.
- Farm gate prices have plummeted 90%, from 20 baht pre-pandemic to a record low of 2 baht (6¢) per coconut.
- Elderly farmers are forced to work indefinitely as profits vanish, unable to afford retirement or basic farm inputs like fertilizer.
Why It Matters
This case study reveals how foreign capital consolidation in agriculture can devastate local livelihoods and destabilize rural economies.