Malaysia’s Coconut Crisis: Imports and Initiatives to Stabilize Prices

In a bid to meet soaring demand during the festive season, the Malaysian government has turned to imports, announcing plans to bring in 640 tonnes of coconuts monthly from Indonesia, Sabah, and Sarawak to supply Peninsular Malaysia. This stop-gap measure, overseen by the Federal Agricultural Marketing Authority (Fama), comes as the nation grapples with a persistent shortage of mature coconuts, driving up prices of coconut-based products like coconut milk—a staple in Malaysian cuisine.

Agriculture and Food Security Minister Datuk Seri Mohamad Sabu revealed that as of 4 March 2025, Fama had already imported 734 tonnes of coconuts valued at RM1.615 million, distributing them to 42 operation centres and over 500 outlets, including wholesalers and coconut milk businesses. “This measure was taken to help stabilise the price and ensure continuous supply for the coconut milk and other coconut-based industries,” Mohamad stated during a session in the Dewan Rakyat on 6 March.

Yet, this is merely a temporary fix for a deeper structural issue. Malaysia’s coconut production, while rising from 536 million to 623 million coconuts in 2023, falls far short of the country’s annual demand of 1.3 billion coconuts—or roughly 108 million per month. The shortfall has been exacerbated by a combination of external and internal pressures, including skyrocketing import costs, shifting farmer preferences, and unpredictable weather patterns. As Mohamad noted, the price of imported coconuts from Indonesia, which accounts for 98% of Malaysia’s coconut imports, has surged from RM1.10 each in early 2024 to RM2.20 by March 2025, partly due to competing demand from China.

A Perfect Storm of Challenges

The coconut crisis is a microcosm of broader challenges facing Malaysia’s agricultural sector. On the international front, Indonesia’s dominance as a supplier leaves Malaysia vulnerable to price fluctuations driven by global demand. As a major exporter to markets like China, Indonesia has little incentive to prioritise Malaysian needs when prices climb. This dependency underscores the fragility of relying heavily on a single source for a critical commodity.

Domestically, the shift among local farmers towards cultivating young coconuts, which fetch higher prices for direct consumption, has reduced the supply of mature “hard” coconuts essential for producing coconut milk and oil. Young coconuts, often sold as a refreshing drink, are a lucrative crop in a market increasingly driven by tourism and urban demand. However, this trend has left industries reliant on mature coconuts struggling to secure consistent supplies.

Weather disruptions have further compounded the problem. Erratic rainfall and prolonged dry spells, linked to broader climate change patterns in South East Asia, have hampered coconut yields. While specific data on weather impacts for 2024-2025 was not provided in the minister’s statement, historical trends suggest that such conditions disproportionately affect smallholder farmers who lack the resources for irrigation or adaptive farming techniques.

Short-Term Relief, Long-Term Vision

Beyond the immediate imports, the Malaysian government is rolling out medium- and long-term strategies under the Coconut Industry Development Programme 2021-2025. In the medium term, efforts focus on replanting and rehabilitating coconut plantations, supported by financial aid for farmers in the form of seeds, fertilisers, insecticides, and infrastructure improvements like drainage systems and farm tools. The ministry has allocated RM15 million to support 943 farmers, covering a replanting area of 1,890.7 hectares and rehabilitation of 285 hectares. Additionally, 1.2 million high-quality coconut seeds have been produced to bolster domestic production.

For the long term, the ministry is encouraging farmers to plant high-yield and resilient varieties such as Matag, Malayan Red Dwarf, Malayan Yellow Dwarf, and Pandan. These variants are selected for their adaptability to local conditions and potential to increase output, reducing reliance on imports over time. “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 asserted.

Economic and Cultural Stakes

The coconut shortage is more than just an agricultural issue; it carries significant economic and cultural implications. Coconut milk is a cornerstone of Malaysian cuisine, integral to dishes like nasi lemak, rendang, and laksa, which are not only daily staples but also symbols of national identity during festive seasons such as Hari Raya and Deepavali. Price hikes—reflected in the rising cost of coconut milk at markets and for small businesses—directly affect household budgets and the profitability of food vendors, many of whom operate on thin margins.

Economically, the coconut industry supports a wide ecosystem of stakeholders, from rural farmers to urban wholesalers and small-scale processors. A sustained shortage risks disrupting livelihoods across this chain, particularly for the 943 farmers already enrolled in the government’s development programme. If domestic production fails to scale up, the continued reliance on imports could drain foreign exchange reserves and expose Malaysia to further price volatility in global markets.

Moreover, there are broader food security concerns. While coconuts may seem a niche commodity compared to rice or palm oil, their role in Malaysia’s food culture and economy makes stable access a priority. The government’s intervention reflects an awareness of this, but the timeline for self-sufficiency remains uncertain. If the replanting and rehabilitation initiatives succeed, they could reduce import dependency within a decade. However, if global demand for coconuts continues to outstrip supply—or if climate challenges intensify—these efforts may fall short, leaving prices high and availability inconsistent.

Regional Context and Comparative Lessons

Malaysia is not alone in facing agricultural supply chain disruptions. Across South East Asia, countries like Thailand and the Philippines—both major coconut producers—have encountered similar issues, balancing domestic needs with export opportunities. The Philippines, for instance, has implemented policies to incentivise local processing of coconut products to retain value within its borders, a model Malaysia could consider. Thailand, meanwhile, has invested in hybrid coconut varieties to boost yields, mirroring Malaysia’s focus on strains like Matag and Malayan Red Dwarf.

Yet, Malaysia’s heavy reliance on Indonesian imports sets it apart. Unlike the Philippines, which benefits from vast domestic production, Malaysia’s smaller coconut-growing areas in Sabah and Sarawak cannot yet meet national demand. A potential strategy could involve deepening intra-regional cooperation within ASEAN, perhaps through agreements to stabilise coconut trade or joint research into climate-resilient farming practices. Such collaboration could mitigate the risks of over-dependence on a single supplier while fostering regional food security.

Public Sentiment and Political Pressure

The coconut price hike has not gone unnoticed by the Malaysian public, with social media platforms reflecting growing frustration over the cost of essential goods. During festive seasons, when demand for coconut milk peaks, any perception of government inaction could fuel discontent. Mohamad’s response in the Dewan Rakyat to a question from Rodziah Ismail of PH-Ampang indicates that the issue has already reached parliamentary attention, suggesting political pressure to deliver results.

If the government’s measures—particularly the medium- and long-term initiatives—fail to lower prices or improve supply within a reasonable timeframe, it could become a point of criticism for the administration. Conversely, successful implementation could bolster public confidence in agricultural policy, demonstrating a commitment to supporting both farmers and consumers. The stakes are high, as food prices often serve as a barometer of governance in the eyes of ordinary citizens.

Looking Ahead: A Sustainable Path?

The Malaysian government’s multi-pronged approach to the coconut crisis—combining immediate imports with strategic investments in domestic production—offers a roadmap for addressing similar agricultural challenges. However, the success of these initiatives hinges on execution. Replanting and rehabilitation programmes must be paired with robust support for farmers, including training on modern techniques and protections against market fluctuations. Without such safeguards, smallholders may remain reluctant to shift back to mature coconuts, prioritising short-term gains from young coconut cultivation.

Moreover, the impact of climate change cannot be ignored. While the Coconut Industry Development Programme does not explicitly address adaptation to weather variability, future policies should integrate climate-smart agriculture, such as drought-resistant varieties or improved irrigation systems. Partnerships with research institutions or international bodies could accelerate these efforts, ensuring that Malaysia’s coconut sector is not only productive but also resilient.

For now, the monthly import of 640 tonnes of coconuts provides breathing room, ensuring that festive celebrations are not marred by shortages. Yet, the rising cost of imports and the structural gaps in domestic supply signal that this is a temporary reprieve. If Malaysia is to secure a stable future for its coconut industry, the focus must shift from firefighting to building a foundation for self-reliance. The coming years will test whether the seeds—both literal and figurative—planted today can bear fruit.