Asia Cocoa-Prices little changed during seasonal lull, slow demand

JAKARTA, July 17 (Reuters) - Cocoa butter ratios, a key indicator of demand, were little changed in Asia this week during a seasonal lull and as traders awaited second-quarter grinding data due this week, dealers said on Thursday.

When ground, cocoa beans yield roughly equal parts butter, which gives chocolate its melt-in-the-mouth texture, and powder - used in cakes, biscuits and drinks. Grinders do not reveal the size of their butter or powder stocks.

Butter ratios were quoted at 2.43-2.50 times London futures , little changed from last week, with some reports of deals. Butter prices are calculated by multiplying London and New York cocoa futures by the ratios, which are set by grinders.

"The market has been very quiet. The big guys are not really coming into the market to buy," said a dealer in Singapore, adding that demand was low because the futures prices were high.

"Whatever ratios you use to multiply it's going to be expensive for them."

Powder prices were quoted at between $1,500 and $1,600 a tonne, a dealer said, little changed from last week.

Cocoa futures prices have been on the increase since late 2013 and hit three-year highs earlier this month as traders worried that demand would outpace supply from the world's top-growing region of West Africa.

"Futures were undervalued and the farmers were not getting their fair price of the gain," another trader said referring to the recent highs, adding that the market was rebalancing so growers get a better price for their crop.

London's second-month September cocoa bean contract closed at 1,912 pounds on Wednesday.

Dealers are waiting for the release of second quarter grinding data by the Malaysia Cocoa Board and the Cocoa Association of Asia (CAA) due on Friday for clues on demand and inventory.

Meanwhile, Indonesia's cocoa bean output is expected to climb 14.7 percent this year, government data released on Thursday showed.

The Indonesian Cocoa Association (Askindo) said impacts of the El Nino weather phenomenon had not been impacting cocoa producers yet, whose output is expected to increase.

"The forecast says this is an El Nino year, but we haven't seen it yet. The air is still good and there hasn't been a long dry season ... Production has increased because a lot of new plants have started to fruit," association Chairman Zulhefi Sikumbang told Reuters.

Askindo, which uses a different method to calculate production, expects a 9 percent increase in Indonesia's cocoa production this year. (Reporting by Fergus Jensen; Editing by Anand Basu)