Iain Ferguson, chief executive of the sugar refining group Tate & Lyle has hit out at hedge funds and other commodity speculators, calling for them to face greater regulation in a bid to hold back soaring food prices.

Ferguson said hedge fund money was helpful in creating liquidity in the futures market but suggested the level of their involvement was harming companies.

It's not helpful to have quite so much speculative money here, he said. I think you need enough liquidity in the futures market for it to do its job but if you look at the swings that have been going on, they're not helpful to either farmers, processors or consumers. They create false markets.

In May, hedge fund manager Michael Masters told a US Congressional Hearing that speculation in commodity futures had increased 20 times in the past five years - from $13bn to $260bn - and during that time the price of a basket of commodities had risen by 183 per cent.

The increase in demand from speculators, Masters said, had been almost equal to the increase in demand coming from China.