In a medium sized pot, bring the water and sugar to a boil. When boiling, turn the heat to low and stir in the milk. When the mixture returns to a boil, turn off the heat and stir in the coconut milk. Make sure that you are not boiling the coconut milk (which would make it oily) Remove from heat, let cool to room temperature and chill in refrigerator for at least 2 hours.

Soak tapioca pearls in cold water for 20 minutes. The pearls will expand and turn bright white. Drain. In a medium pot, add about a quart of water and bring to a boil. Turn off heat, add the drained tapioca pearls and stir constantly for 1 1/2 minutes.

Immediately drain in fine mesh sieve and run cold water through the sieve to stop the tapioca pearls from cooking further.

Combine with the coconut milk mixture and continue to chill in refrigerator. You can prepare everything above up to 3 days in advance.

To serve, ladle the sweet coconut milk with tapioca into a bowl and add a big spoonful of diced, fresh melon.