From dovecot.conf..

Space separated list of wanted authentication mechanisms:

plain login digest-md5 cram-md5 ntlm rpa apop anonymous gssapi

NOTE: See also disable_plaintext_auth setting.

mechanisms = cram-md5 plain login

What is your setting in dovecot-sql.conf?

#default_pass_scheme = MD5 default_pass_scheme = PLAIN

As a side note, if you plan to use TLS, then your setup will be much easier if you keep passwords in MySQL non-encrypted, no matter what postfixadmin thinks of it.

Regards, Gregory