Malaysia’s Dec 16 palm oil inventory was higher than expected at 1.67m Tonnes vs 2015’s 2.63m tonnes, but still reflected a decline of 36.8% yoy on the back of weaker production. In 2017, the market expects production to recover to 19.5m-20.0m tonnes and this will largely take place in 2H17. Average CPO price for 2017 is expected at RM2,600/tonne (2016: RM2,653) as production is likely to recover