The coconuts are used to feed the shark at Booga Bay, using the coconut cannon. The medicine man will mix your ingredients into one that you can use.
(see related question)
it is on shark tooth island
from the man by the coconut house
He is beside the Coconut Cafe and will give you carbonated coconut.
You get a free bottle when you come onto the island.
The carbonated coconut milk is found in front of the coconut cafe.
you give a poison coconut to the shark after you got all the ingredients.
2 are in the temple 1s from the coconut milk guy
He is beside the Coconut Cafe and will give you carbonated coconut.
You use the cannon
The medicine man makes you a potion in a coconut. Shoot it at the shark and it will fall asleep. Swim to the island on the right.
You get it from a man near the coconut shop and click on him
click on the hawiian picking out earwax