BANGKOK– Thailand’s leading economic crime teams say they have found signs of a coconut cartel tied to Chinese investors. Investigators allege the group used Thai nominee companies to take control of large parts of the aromatic coconut business.
Officials say the setup let foreign-backed operators steer buying, processing, and exports, while pushing farm prices down in major growing areas.
The Central Investigation Bureau (CIB) and the Department of Business Development (DBD) are running the investigation, which focuses on suspected breaches of Thailand’s Foreign Business Act , which limits foreign ownership in certain sectors, including parts of agriculture trading and processing. The law is meant to protect local producers and national interests.
Aromatic coconuts, called “Nam Hom” in Thailand, are valued for their sweet, fragrant water. They are also a key export item, and China remains the biggest buyer. Still, growers and officials have raised alarms after a steep fall in farm-gate prices.
Investigators have flagged 15 companies they believe used Thai citizens as nominee shareholders to conceal foreign control, mostly tied to Chinese interests. According to officials:
- 11 companiesoperate in Ratchaburi Province, a major center for processing and export.
- One company is based in Samut Prakan, Pathum Thani, Samut Sakhon, and Bangkok.
During an operation called “Peeling Back the Nominees,” CIB teams searched eight businessesin Ratchaburi. Authorities say they found indications that Thai shareholders held equity on paper, while Chinese investors allegedly ran day-to-day decisions, from buying coconuts to shipping products abroad.
Officials also claim the network stretched across the supply chain. That includes leasing orchards, buying fruit, packing, and exporting. As a result, investigators say operators could shape market conditions and pricing.
How authorities say the nominee setup works
Investigators describe a repeat pattern:
- Thai nomineesregister companies to appear compliant under the Foreign Business Act.
- Foreign investors, mainly Chinese, supply funding and control key decisions behind the scenes.
- The companies buy coconuts directly from farmers, often at low prices.
- After packing or processing, the product ships abroad, mostly to China, at much higher prices.
- Some firms allegedly report losses to reduce tax obligations.
Authorities highlighted a wide gap between what farmers receive and what exporters earn:
- Farm-gate prices paid to growers: 2 to 5 baht per coconut, and sometimes 1 to 2 bahtfor lower grades.
- Export prices (especially for China-bound shipments): 35 to 50 baht per coconutafter processing.
Investigators say the price spread creates strong profits for operators, while leaving farmers struggling to cover basic costs.
DBD Director-General Poonpong Naiyanapakorn said the problem goes beyond normal ups and downs. He noted that oversupply and weaker Chinese demand can lower prices. However, he added that collusion and nominee structures can deepen the drop by giving foreign-backed groups an unfair edge.
Pressure on farmers and wider damage to the coconut industry
Growers in key areas, including parts of Songkhla and the central zone around Ratchaburi, say income has fallen fast. Farm-gate prices averaged 3.20 bahtin February 2026, down from 5.75 bahtin December 2025.
Farmer groups also claim that Chinese-linked buying centers drove prices to levels that don’t make sense for long-term production. In some cases, they say, fruit is sold for only 1 bahteach. Many growers now face:
- Lower income, which leads to neglected orchards and weaker output quality.
- A harder fight against large operators that lease land and scale up quickly.
- Extra industry problems, such as seasonal supply swings, counterfeit goods, and slipping export standards.
Thailand’s share of China’s aromatic coconut market has also weakened. It fell from 75%to about 48%. Export value dropped from 9.88 billion bahtin 2023 to 6.45 billion bahtin 2025. At the same time, only about 30%of output meets strict export-grade standards, which adds to the strain.
Legal exposure and possible penalties
Thailand treats nominee ownership as a serious violation under the Foreign Business Act. Thai nationals who act as proxy shareholders can face:
- Up to 3 yearsin prison.
- Fines from 100,000 to 1 million baht.
- Possible asset seizures.
Authorities say the case has also moved to other agencies for review, including the Department of Special Investigation (DSI), Anti-Money Laundering Office (AMLO), the Revenue Department, and the Trade Competition Commission of Thailand (TCCT).
The CIB warned that nominee structures do more than break rules. Investigators argue they can cause lasting damage to farmers’ income and the broader economy.
In response to falling coconut prices and concerns about foreign participation in fruit packing, the DBD has held urgent meetings with several agencies. Officials say they are reviewing the supply chain step by step, from farming and leasing land to packing and exports, to pinpoint what is driving the price slide.
Current proposals include:
- Tighter review of company registrations that involve foreign participation.
- Stronger enforcement against nominee arrangements across multiple sectors.
- Possible updates to the Foreign Business Act to balance investment and local protections (even as other industries, such as software and telecom, have seen eased limits in recent years).
Officials say lawful foreign investment is welcome. Still, they insist that nominee schemes meant to avoid the law will face enforcement.
Narongsak Chuensuchon, chair of the Federation of Thai Industries (Ratchaburi Chapter), said more than 200 Chinese-backed middlemenoperate across the Ratchaburi, Nakhon Pathom, and Samut Sakhon area. His estimate points to how widespread the issue may be.
Farmer advocates and some senators are calling for fast action. Ideas include government purchases with price support, with limited efforts reported at 5 bahtper fruit, and placing aromatic coconuts on a “watchlist” for closer tracking.
Analysts warn that without strong enforcement and clear market rules, Thailand could lose more ground in a premium export category long linked to the country’s farming reputation.
For now, raids and reviews continue. Meanwhile, Thailand’s aromatic coconut trade sits between foreign capital influence and the push to protect local growers.
