There's a lot of confusion in the world of coconuts - what is coconut milk? and what's coconut water? I've heard of cooking disasters when a recipe called for one of these ingredients and the cook substituted the other. And I've read travel articles in which otherwise knowledgeable writers talk about some marvelous experience on a beach drinking coconut milk from a fresh green coconut. Although both substances come from exactly the same plant, the coconut palm found in tropical zones throughout the world, they are entirely different things.
In Brazil, both are used extensively. Brazilian food, or Brazilian beach life, without these two ingredients would be missing some very significant signature flavors. So to make things perfectly clear....
Coconut water (água de coco in Portuguese) is the clear liquid inside young green coconuts. Inside the coconut is a round cavity which is filled with this liquid, surrounded by a jelly-like substance. As the coconut matures, the liquid evaporates, and the jelly hardens into the familiar white "meat" of a dried coconut. It is very refreshing drink, and in Brazil is usually served directly from a chilled fresh coconut, which has been opened on the top with a machete. Coconut vendors are ubiquitous on Brazilian beaches, and can be found as well on streets and squares all over Brazil. Coconut water is extremely nutritious, without having many calories, and is often recommended for people with dietary products. It has only 16.7 calories in 100 grams, and has high amounts of potassium and and other minerals. In fact, per ounce, coconut water has more electrolytes than most sport drinks, and more potassium than bananas. It is a sterile liquid, so there is no health concerns in areas where water might be polluted. It is even used as an intravenous hydrating solution in some tropical areas where no saline solution is available.
Coconut milk (leite de coco), on the other hand, is a product not of young green coconuts, but of mature, dry coconuts, and is a manufactured product rather than a natural one. To make coconut milk, the meat of a mature coconut is grated. Then boiling water is poured over the grated coconut, and when the mixture cools, the coconut is squeezed to extract the milk. Unlike coconut water, coconut milk has a high concentration of fat, and the result of the first squeezing of grated coconut is sometimes called coconut cream, with subsequent squeezings producing coconut milk. Coconut milk is rarely served as a drink, and its primary uses are in cooking. In Brazil, coconut milk is particularly associated with the cooking of the state of Bahia. Other tropical cuisines, like Thai and Polynesian cuisines, make wide use of coconut milk.