Coconut is an important crop in the smallholder sector of South and Central Thailand. The harvested area under coconut is 344,000 hectares, which annually produces some 1.204 m illion nuts, which enter internal trade equivalent to 361.000 metric tonnes of copra. It was expected that the production in 2005 would increase slightly by 0.4%, as a result of favourable climatic conditions. However, the outbreak of Brontispa longissima throughout the main coconut planting area has been severe since 2004, therefore it w ill affect the production over the next two years.

Export of some coconut products mainly consist of fresh coconut, desiccated coconut, copra, coconut oil, palm sugar, activated carbon and coir fibres. The contribution from these export items to the total export earning, in 2005 was only US$ 24.84 million. Thailand also imported some coconut products, amounting to US$ 5.5 million, last years, to make up its production shortfall.

In recent years the coconut processing industry has faced a shortage of raw materials because coconut farmers have replanted coconut palm with oil palm and rubber. At present the prices of oil palm decrease so that some farmers turn back to grow coconut, using precocious and high-yielding hybrids, particularly Malayan Yellow' Dwarf x Thai Tall (Chumphon hybrid No.2) and West African Tall x Thai Tall (Chumphon hybrid No.60).

In the case of biofuels, using coconut for biofuel production may become an attractive alternative when coconut oil prices are low, thus providing a solution for coconut oil producers and farmers as well.