* Butter ratios at 2.80 times London for this year's delivery
* Powder offered as low as $1,300/T
* Dealers digest Q3 Asian grindings data
By Lewa Pardomuan
SINGAPORE, Oct 18 (Reuters) - Cocoa butter ratios hovered this week around levels last hit in 2006 but trading activity slowed down in Asia after recent purchases from chocolate makers, while a dip in powder prices spurred mild buying, dealers said on Friday.
Cocoa beans, when ground, yield roughly equal parts of butter and powder, which is used in cakes, biscuits and drinks. The price of butter, which gives chocolate its melt-in-the-mouth texture, is set by multiplying the ratio with relevant contracts in London and New York futures. <0#LCC:> <0#CC:>
Butter ratios for this year's delivery were unchanged from last week at 2.80 times London futures, but the values for shipments in the first quarter of next year were slightly lower at 2.70 times. (CCMYID-BUT-P1).
Butter ratios have been firm around seven-year highs over the past week due to demand from chocolate makers. Chocolate sales normally surge in the main consumer regions of Europe and North America during Christmas, Valentine's Day and Easter.
Cocoa powder was offered as low as $1,300 a tonne, down from $1,400 last week and $4,000 a tonne in January, with dealers reporting some deals to consumers in Asia. Powder demand has been subdued as chocolate and beverage makers, who are aware stocks are ample, wait for cheaper prices.
"There are people who come to buy powder, but I don't see opportunistic buyers," said a dealer in Singapore, referring to consumers who normally buy on dips.
A sharp increase in Asian grindings in the third quarter of this year failed to stir up the market because the numbers looked artificially high, said dealers. Grinding is a key indicator of demand for chocolate's ingredients.
"CAA Q3 grindings are indeed up by 12 percent because there are more reporting members this quarter compared to last year," said another dealer in Singapore, referring Thursday's data issued by the Cocoa Association of Asia (CAA).
"But in my view, total grindings this year will be up by about 2 to 3 percent."
Grinders in Singapore, Indonesia and Malaysia processed 161,097 tonnes of cocoa beans in the third quarter, compared with 143,659 tonnes in the same period in 2012, according to the CAA.
The CAA gave no details on the increase, but some dealers attributed the strong third-quarter grindings to new members providing data to the CAA and a jump in capacity in Indonesia.
Grindings in Malaysia, which is Asia's largest, dropped 3.1 percent in July-September from a year before to 71,150 tonnes, domestic data showed on Monday, indicating processors had to cut capacity to bring down powder stocks.
The drop in grindings could also be due to grinders being saddled with substandard supply after processing African beans that developed a high acid content on the long journey to Asia, some dealers said. Butter with high acidity has to be treated before they can be sold to consumers.
"They had to cut down production because they had acidic butter stuck in their tanks," said the second Singapore dealer.
Butter ratios could stay at the current level next week, but grinders may cut the price of powder further to attract demand. (Editing by Muralikumar Anantharaman)