"I have recently found an interesting book. It's about the magical properties of Fairy's Powder. I have so many ideas on how to use it! I think I could use it to craft disguises, make unguents or even power magical flight! But I won't be able to begin my experiments without a supply of the powder... If you ever come across any, I'll happily buy it from you."
After heading down to Laksy's Anchor take the road south and then back northeast when it forks. Follow the road over a bridge and into an area with where the ground is a blue-green and there are black, barren trees with large blue pods hanging from them. Kill Blue Crystals in the area until enough Fairy's Powder has dropped then return to Merchant Christe.
"This is fairy's powder? Good, let's start the experiment right now. If I'm successful, I will make you a grand and legendary potion. First, put an herb of eternal youth into the reagent bottle of dews, and add a magic formula... err, careful here... done. Finally! If I add the fairy's powder... great! Now we only have to wait! .......... (bubbling...) Eh? Wait, why is it boiling? It's also rather dark.
What! Wait, what is this? Bubbles... bubbles!!? (Boom---!!) ......... On no~! What is this book?! It's full of lies!"