Take a saucepan and add condensed milk, grated coconut and butter. Mix everything well before turning on the heat. This helps the ingredients blend evenly and smoothly.

Place the pan on low heat. Stir continuously using a wooden spoon. Cook until the mixture becomes thick and starts leaving the sides of the pan. This step is very important for texture.

Remove the mixture from heat. Let it cool for a few minutes. It should be warm but easy to handle. Cooling helps shape the candies properly without sticking.

Grease your hands lightly with butter. Take small portions of the mixture and roll them into balls. Try to keep them equal in size for even coating later.

In another pan, add sugar and water. Heat it slowly until it turns into a golden caramel. Do not stir too much. Let it reach a smooth syrup texture.

Dip each coconut ball into the caramel carefully. Make sure it is fully covered. Work quickly because caramel hardens fast. Use a fork for easy handling.

After caramel coating, roll the balls in extra grated coconut. This adds texture and flavor. It also helps balance the sweetness of caramel.

Place the coated bala baiana pieces on a tray. Let them cool completely. Once set, they become firm, shiny and ready to enjoy.