For optional toasted coconut: In a dry frying pan over medium-low heat, toast the shredded coconut until it's golden brown, 2 to 3 minutes. Immediately transfer to a plate to cool, set aside (see note).
½ cup unsweetened shredded coconut
Place rice in a fine mesh strainer and rinse until water runs mostly clear, about 1 minute.
1 ½ cups jasmine rice
Pour the rice, coconut milk, water, sugar, and salt into a medium saucepan and stir to combine.
1 can (13.6 to 14 ounces) coconut milk, ¾ cup water, 2 tablespoons granulated sugar, 1 teaspoon kosher salt
Leaving the pot uncovered, bring rice to a boil over high heat. Stir once, cover, and reduce heat to low.
Simmer covered for 17 minutes. Remove from heat and let rest covered for 10 minutes. Fluff with a fork and serve with toasted coconut, if desired.
Video
Notes
Coconut milk: Be sure to buy canned unsweetened coconut milk; regular or light coconut milk will work fine although I prefer regular. Don't use coconut milk beverages which come in a carton and have added ingredients like water, sweeteners, and thickeners. This type of coconut milk won't work for this recipe.
Toasted coconut: You can toast the coconut ahead of time. Once it's completely cool, store it in an airtight container or resealable bag in the pantry for 1 to 2 weeks. It can also be frozen.
Serving suggestions: For variation, omit toasted coconut. Coconut rice can be served plain, or with grated lime zest, sliced scallions, chopped fresh cilantro, toasted slivered almonds, or fresh fruit, such as mango or pineapple.
Instant Pot instructions: Decrease water to ½ cup. Mix all ingredients (except shredded coconut) in pressure cooker. Put lid on, select Pressure Cook (High), and set timer for 3 minutes. Let pressure release naturally for 7 minutes. Release any remaining pressure, remove lid, and fluff rice. If desired, turn off heat and leave covered for 10 minutes after fluffing to let rice soak up moisture.
Storage: Coconut rice stores well; it doesn't dry out like cooked white rice. Refrigerate it in an airtight container for up to 5 days, or freeze it for up to 6 months (thaw before reheating). Warm it up in the microwave.