Prepare the Spice Paste. Grind shallots, garlic, fresh ginger, fresh galangal, fresh turmeric, roasted candlenuts, coriander powder, and cumin powder into a fine paste using a food processor or mortar and pestle. Add a little cooking oil if needed for grinding.
Sauté the Spice Paste. Heat cooking oil in a large pot or wok over medium heat. Sauté the prepared spice paste, bruised lemongrass, kaffir lime leaves, and bay leaves until fragrant and the oil separates, about 8-10 minutes.
Cook the Chicken. Add chicken pieces to the pot and stir to coat evenly with the spice paste. Cook for 5-7 minutes, until the chicken changes color on all sides.
Simmer with Thin Coconut Milk. Pour in the thin coconut milk and water. Bring the mixture to a gentle simmer, cover, and cook for about 20 minutes, or until the chicken is almost tender. Stir occasionally to prevent sticking.
Add Thick Coconut Milk and Seasoning. Add the thick coconut milk, salt, and palm sugar. Stir well. Continue to simmer uncovered over low heat for another 10-15 minutes, stirring frequently, until the sauce thickens to your desired consistency and the chicken is fully cooked and tender.
Serve. Remove from heat and serve hot, garnished with fried shallots.
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