Coconut is a slur used to describe Blacks in a derogatory way. Blacks, Hispanics, Filipino, Arabs, etc. Mainly used to describe dark-skinned people who are perceived as trying to be "white"...brown on the outside, white on the inside.
The word Coconut is a racial slur that has been used historically to degrade and dehumanize blacks. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to blacks. If you are unsure about whether or not it is appropriate to use the word Coconut, it is best to err on the side of caution and avoid using it in any situation.