* Butter ratios little changed at 2.05 times London
* Powder prices vary, offered at below $2,000/T
By Lewa Pardomuan
SINGAPORE, June 14 (Reuters) - Chocolate makers turned their backs on the butter market as ratios stayed at their highest since the second quarter of 2009, while seasonal demand had little impact on cocoa powder prices, dealers said on Friday.
Cocoa beans are ground to produce roughly equal parts of butter and powder, which is used to make cakes, biscuits and drinks. Butter, which gives chocolate its melt-in-the-mouth texture, stood at ratios of 2.05 times London futures, little changed from 2.03 in late May.
“There are a lot of bids at 1.96 to 1.97, but the problem is sellers are quoting the ratios at 2.05. That’s why it doesn’t match,” said a dealer in Singapore.
“Sellers don’t want to cut down the ratios because the powder market is so bad. Some people are selling powder at $1,900. It’s very hard for them to make money.”
Butter has risen to the current level after grindings in Asia dropped nearly 11 percent in the first quarter on falling margins. A weak powder market also forced grinders to push up butter ratios to offset losses.
“There’s a gap between sellers and buyers at the moment. We haven’t seen deals for butter yet this week,” said another dealer in Singapore.
“Sellers are quoting butter at 2.05 and buyers at 2.00. Powder demand is still weak and prices are trending lower.”
Butter prices are determined by multiplying the ratio, a value set by grinders, with London or New York cocoa futures.
Powder was offered at $1,900 to $2,200 a tonne, down from as much as $2,300 in late May, despite demand from China and the Middle East ahead of the Muslim fasting month of Ramadan in July.
Main buyers such as Nestle SA and Kraft Foods Group Inc were on the sidelines, dealers said.
“We still see demand from the Middle East, and India is definitely buying. But to be honest, the biggest cocoa powder buyer in the region, which is Nestle, hasn’t entered the market yet,” said the first dealer.
But butter ratios could stay at the current level next week on hopes that chocolate makers could return to the market to cover requirements in the third quarter of this year.
Chocolate sales normally surge in the main consumer regions of Europe and North America at the time of major festivals such as Christmas, Valentine’s Day and Easter.