Malaysia Tackles Coconut Shortage with Imports and Long-Term Plans

Malaysia is grappling with a persistent shortage of coconuts, a staple ingredient in its cuisine and food industry, prompting the government to announce a multi-pronged strategy to stabilize supply and prices. As a stop-gap measure, the government will import 640 tonnes of coconuts monthly from Indonesia, Sabah, and Sarawak to meet demand in Peninsular Malaysia during the festive season. This comes amid soaring prices for coconut-based products, particularly coconut milk, driven by global demand, weather challenges, and shifting local farming practices.

Agriculture and Food Security Minister Datuk Seri Mohamad Sabu revealed the initiative in the Dewan Rakyat on 6 March, emphasizing the urgency of addressing a national demand of 1.3 billion coconuts annually—far outstripping the country’s production of 623 million in 2023. “This measure was taken to help stabilise the price and ensure continuous supply for the coconut milk and other coconut-based industries,” Mohamad said, as reported by local outlets.

Immediate Relief Through Imports

The Federal Agricultural Marketing Authority (Fama) has been tasked with managing the short-term imports, having already brought in 734 tonnes of coconuts from Sabah and Indonesia by 4 March, valued at RM1.615 million. These supplies have been distributed across 42 operation centres and 509 outlets, with allocations also made to 16 wholesalers and 202 coconut milk businesses. The reliance on Indonesia, which supplies 98% of Malaysia’s imported coconuts, has become increasingly costly, with prices per coconut rising from RM1.10 to RM2.20 since late 2024.

This price surge is partly due to Indonesia’s growing exports to markets like China, which have intensified competition for mature or ‘hard’ coconuts—the type most used in coconut milk production. Meanwhile, domestic factors in Malaysia, such as adverse weather and a shift among farmers towards cultivating young coconuts for their higher market value, have further strained the supply of mature coconuts. The result is a significant gap between supply and demand, with the country needing around 108 million coconuts monthly to keep up.

Medium and Long-Term Strategies

Beyond immediate imports, the Malaysian government is rolling out medium- and long-term interventions under the Coconut Industry Development Programme 2021-2025. In the medium term, efforts include replanting and rehabilitating coconut plantations, alongside providing farmers with agricultural inputs such as high-quality seeds, fertilisers, and insecticides. Basic infrastructure support, including farm drainage systems and tools, is also being offered to boost productivity.

For the long term, the Ministry of Agriculture and Food Security has allocated RM15 million to support 943 farmers, targeting a replanting area of 1,890.7 hectares and rehabilitating 285 hectares of farmland. Additionally, 1.2 million high-quality coconut seeds have been produced to encourage the cultivation of premium variants like Matag, Malayan Red Dwarf, Malayan Yellow Dwarf, and Pandan. “With these measures in place, the ministry believes the price hike for coconut-based products, especially coconut milk, can be controlled and improved in the long term through domestic production,” Mohamad stated.

These initiatives aim to reduce Malaysia’s heavy dependence on imports by bolstering local production capacity. If successful, they could help shield the country from volatile international prices and ensure a more sustainable supply chain for coconut-based industries, which are integral to Malaysian food culture and economy.

Economic and Cultural Implications

The coconut shortage is more than just a supply chain issue; it strikes at the heart of Malaysia’s culinary identity. Coconut milk is a cornerstone of dishes like nasi lemak, rendang, and laksa, which are not only everyday staples but also cultural symbols celebrated during festive seasons like Hari Raya and Deepavali. Rising prices—reflected in the cost of coconut milk and related products—place a financial burden on households and small businesses, particularly those in the food sector.

Economically, the shortage highlights broader challenges in Malaysia’s agricultural sector, including the tension between market-driven farming choices and national food security needs. The preference among farmers for young coconuts, often sold as a refreshing drink, illustrates how global trends can disrupt local supply chains for traditional ingredients. If unaddressed, this shift could deepen Malaysia’s reliance on imports, exposing it to external price shocks and geopolitical trade dynamics, such as Indonesia’s export priorities.

There are also environmental dimensions to consider. Coconut cultivation, when managed sustainably, can support biodiversity and provide livelihoods for rural communities. However, the push for rapid replanting and rehabilitation must balance productivity goals with ecological concerns, ensuring that land use changes do not exacerbate deforestation or soil degradation—issues that have historically plagued agricultural expansion in the region.

Regional Context and Comparisons

Malaysia’s coconut conundrum is not unique in South East Asia, where agricultural commodities often face similar supply-demand imbalances. Indonesia, the world’s largest coconut producer, has seen its own domestic prices rise due to export demand, affecting neighbouring countries like Malaysia and the Philippines, another major coconut hub. In the Philippines, efforts to revitalize the coconut industry have included government-backed replanting schemes and disease-resistant hybrid varieties, offering potential lessons for Malaysia.

Thailand, too, has faced periodic shortages of coconuts, often turning to imports while promoting domestic cultivation through subsidies. These regional parallels suggest that Malaysia’s multi-tiered approach—combining imports with long-term agricultural investment—aligns with broader strategies in the ASEAN bloc. Yet, the effectiveness of these plans will depend on execution, farmer uptake, and adaptability to climate challenges, which increasingly threaten tropical agriculture across the region.

Speculative Outlook: Can Prices Stabilize?

Looking ahead, the government’s interventions carry potential but also uncertainty. If the replanting and seed distribution programmes yield results within the projected timelines of the 2021-2025 development plan, domestic production could rise significantly, easing pressure on prices. However, this assumes stable weather conditions and farmer participation—variables that remain unpredictable. Should adverse weather persist or global demand for coconuts continue to outpace supply, prices may remain elevated, even with increased imports.

On the import front, Malaysia’s near-total reliance on Indonesia poses risks. If Indonesia imposes export restrictions or prioritizes other markets like China, Malaysia could face further supply disruptions. Diversifying import sources or accelerating domestic growth will be critical to mitigating such risks, though these are longer-term solutions unlikely to address immediate festive season demands.

It’s worth noting that consumer behaviour may also shift in response to sustained price hikes. Households and businesses might turn to substitutes for coconut milk, such as plant-based alternatives, though cultural preferences are likely to sustain demand for traditional ingredients. These speculative outcomes remain unconfirmed, as data on long-term price trends and consumer adaptation is not yet available.

A Path Forward for Malaysia’s Coconut Industry

Malaysia’s response to the coconut shortage reflects a pragmatic blend of short-term relief and long-term ambition. By importing to bridge the immediate gap and investing in domestic cultivation, the government aims to safeguard both economic stability and cultural heritage. However, the road ahead is fraught with challenges, from global market pressures to local agricultural constraints.

For now, the monthly import of 640 tonnes offers a lifeline to coconut-based industries and festive celebrations. Yet, the true test will be whether the Coconut Industry Development Programme can deliver on its promise of self-sufficiency. As Malaysia navigates this delicate balance, the humble coconut stands as a reminder of the intricate ties between agriculture, economy, and identity in South East Asia—a region where even a single crop can carry profound significance.