When I click NPC Murt, he doesn't show any options. I do have totems in my inventory. Did I miss anything?
If I remember correctly, the quests to unlock the Totem Exchange are "Murt's Letter" and "Alcaster's Crystal". Check your Available tab? Edit: I see you've edited your post and found the quest. Good to know your issue is solved!
Thanks for your detailed reply! I only paid attention to the NPC in LHC, missed quest "Alcaster's Crystal" from Alcaster.