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Coconut oil comes from the nut (fruit) of the coconut palm. The oil of the nut is used to make medicine.Coconut oil is also used for lice and in hair products to prevent hair damage.Coconut oil contains a certain kind of fat known as "medium chain triglycerides." Some of these fats work differently than other types of saturated fat in the body. When applied to the skin, coconut oil has a moisturizing effect.