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In a medium saucepan over medium, toast the cashews and coconut, stirring often, until golden brown and aromatic, about 3 minutes. Transfer to a small bowl; set aside.
In the same saucepan, combine the rice, coconut water, lemon grass, turmeric, 1¼ teaspoons salt and ¼ teaspoon pepper. Bring to a simmer over medium-high, then cover, reduce to low and cook without stirring until the rice has absorbed the liquid, 12 to 15 minutes.
Remove from the heat and let stand, covered, for 10 minutes. Fluff the rice with a fork. Remove and discard the lemon grass. Taste and season with salt and pepper. Serve sprinkled with the cashews and coconut.
Optional garnish: Chopped fresh cilantro OR lime wedges OR both