The jump in world cocoa prices to their highest since 1977 has helped AAK to a record quarter, increasing the attractions to confectioners of the vegetables oils group's substitutes for cocoa butter.

The plant fats group, which supplies manufacturers in markets from cosmetics to animal feed, reported a 36% jump to an all-time high of SEK289m in operating profits for the last three months of 2009.

The rise reflected better performance in all three of the group's divisions, with the food ingredients unit raising profits by 59% to SEK143m.

However, the contribution from the chocolate and confectionery fats division stayed ahead, at SEK147m, despite downturns in European and US chocolate markets as its cocoa butter alternatives attracted chocolate makers attempting to keep a lid on costs.

Cocoa concerns 

"The global recession has created a strong incentive to reduce costs, and therefore drives the substitution of expensive cocoa butter by cocoa butter equivalents," the Swedish group said.

And it said it said the market for its alternatives, which are based on shea butter, had further "growth potential", given the weak prospects for expansion in cocoa production in West Africa, the world's biggest supplier of the commodity.

"There is a general concern in the chocolate industry about the long-term supply of cocoa beans - and therefore also a concern about the supply of cocoa butter – because of problems in plantations, mainly in the Ivory Coast," AAK said.

The group had improved its logistics for importing shea, which is also grown in West Africa, to ensure that it had a "considerably better supply than previously".

The comments follow a rally in cocoa earlier this week, amid concerns of instability in Ivory Coast, which put prices back within 2% of last month's 32-year high of £2,350 a tonne in London.

Takeover ambitions 

AAK added that it saw "growth opportunities" in all its business areas, both through continuing to expand its existing operations and through acquisitions.

"The strengthened balance sheet provides the foundation for continued development," Jerker Hartwall, the AAK chief executive, said.

Group earnings for the fourth quarter of SEK 186, compared with an after-tax loss of SEK65m a year before.

AAK shares closed up SEK 1.00 at SEK172.50 in Stockholm.

Cocoa for March delivery closed down £7 at £2,249 a tonne in London, with the better-traded March contract adding £7 to £2,262 a tonne.