April 27 (Bloomberg) -- Cotton futures fell the most in five months, dropping the exchange limit on signs that global supplies are climbing as consumption eases.

Inventories of cotton monitored by ICE Futures U.S. have climbed 77 percent in 2011 after plunging in the previous two years. The fiber has tumbled 23 percent this month, heading for the biggest drop since at least 1986, after rising to a record $2.197 a pound on March 7.

“Demand has pulled back, and we’re seeing suppliers pull back or cancel their exports,” said Louis Barbera, a broker at VIP Commodities in New York. “Before, demand was high and supplies were low, and that’s been solved.”

Cotton futures for July delivery dropped the exchange limit of 7 cents to settle at $1.5339 at 2:50 p.m. on ICE in New York, the lowest since Jan. 20. The 4.4 percent decline was the biggest since Nov. 23.

The commodity surged 92 percent in 2010 as demand soared in China, the world’s biggest buyer. The U.S. is the leading exporter.