Dec. 28 (Bloomberg) -- Cotton fell the most in two months on concern that an impasse in U.S. budget talks will slow the economy, reducing demand for the fiber.

Congressional leaders plan to meet with President Barack Obama today. The president is set to propose a scaled-back package at the meeting to avert tax and spending changes known as the fiscal cliff that could trigger a recession in 2013, a Democratic aide with knowledge of the talks said. House Republicans said they will convene on Dec. 30. Cotton has slumped 19 percent this year as global inventories swelled.

“Fiscal cliff jitters are weighing on the market,” Keith Brown, the president of Keith Brown & Co., a broker in Moultrie, Georgia, said in a telephone interview.

Cotton for March delivery declined 1.8 percent to settle at 74.66 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York, the biggest loss for a most-active contract since Oct. 30. The fiber slumped 2 percent this week, the most since Nov. 2.

“Uncertainty on Wall Street has an impact on all commodities,” Sid Love, the president of Joe Kropf & Sid Love Consulting in Overland Park, Kansas, said in an e-mail.