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Malaysia's annual cocoa grindings seen up 20 pct by 2020

* Malaysia could process 360,000 tonnes of beans a year by 2020

* Nation wants to be centre for chocolates in Asia

By Anuradha Raghu

KUALA LUMPUR, Oct 7 (Reuters) - Malaysia's annual cocoa grindings could rise about a fifth from current levels to 360,000 tonnes by 2020, reflecting rising demand and efforts by the Southeast Asian nation to become Asia's centre for chocolates, a senior industry official said.

Expectations for a long-term capacity increase underscore growing confidence among cocoa processors in Asia, which accounts for more than 20 percent of global grindings. Malaysia processed 299,525 tonnes of cocoa beans in 2012, little changed from the previous year.

"The last three years, we have stabilised at about 300,000 tonnes," Lee Choon Hui, director-general of the Malaysian Cocoa Board, told Reuters on the sidelines of a cocoa conference on Monday.

"The industry capacity can go up to 360,000 tonnes. There's still room for improvement if they want to. We want to be the chocolate centre for Asia, just like Belgium is for Europe," Lee added.

Grinders turn cocoa beans into butter and powder, the main ingredients for chocolates.

Butter premiums have soared to their strongest since 2008 in Asia and Europe, and hit eight-year highs in the United States, after last year's sluggish market and high powder inventory prompted grinders to cut capacity.

Chocolate sales normally surge in the main consumer regions of Europe and North America during celebrations of Christmas, Valentine's Day and Easter, but demand in Asia has also risen steadily over the last few years as growing affluence has given consumers a taste for sweets.

Chocolate lovers worldwide are set to munch through about 7.4 million tonnes of the confectionary in 2013, up nearly 2 percent on a year earlier and worth about $110 billion, according to global market researcher Euromonitor International. (Writing by Lewa Pardomuan; Editing by Muralikumar Anantharaman)