This paper briefly discusses the processing and marketing prospects for small- and large-scale operations in coconut producing countries. The view that the coconut industry is unlikely to change dramatically is discussed. However, it asserts that changes in the coconut processing industry are likely to be greater in countries where there are large captive markets, such as Indonesia and India, and where local small-scale production plays an important role as for example in small rural communities where the infrastructure for small-scale and micro-enterprise development is being promoted. A project outlining the principal objectives of a Common Fund for Commodity research and development project entitled "Improving small-scale extraction of coconut oil" is given as an example on how changes might be effected through the participation of six collaborating countries - India, Indonesia, Ghana, Tanzania, Ivory Coast and Sri Lanka - with emphasis on the development of improved processing at the micro- and small-scale. This type of development is seen as part of an integrated crop production systems approach where coconut is not the only crop. The move to diversification of products by the producer countries to secondary and tertiary production is recognised and discussed. Particular areas of interest derive from expanding urban markets and include the use of coconut in convenience foods for home use, the development of usage in fast food chains, and incorporation into a range of sweet products.