Cotton futures dropped from a record on signs of falling demand for U.S. fiber and as violence escalated in Egypt, threatening the region’s stability.

U.S. shipments of upland cotton slumped 52 percent to 241,598 bales in the week ended Jan. 27 from a year earlier, the Department of Agriculture said today. In Egypt, gunfire erupted in Cairo’s Tahrir Square early today as supporters of President Hosni Mubarak battled with demonstrators demanding an immediate end to his 30-year rule.

While cotton consumption, especially by China, has been strong, “at some point demand will ebb,” said Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas. “Also, the market is nervous because of the political turmoil in Egypt.”

Cotton for March delivery fell 4.36 cents, or 2.5 percent, to settle at $1.7186 a pound at 2:46 p.m. on ICE Futures U.S. in New York. Earlier, prices retreated by the exchange limit of 5 cents after jumping the maximum 5 cents to a record $1.8122.

Cotton prices have more than doubled in the past year as flooding slashed crops in Pakistan and Australia. Imports by China, the world’s biggest consumer, more than tripled in December from a month earlier. Inventories monitored by ICE Futures U.S. have tumbled 84 percent since June 1.

The National Cotton Council of America will release the results of its survey on planting intentions on Feb. 5, the council said today. Farmers will probably expand the growing area 15 percent to a five-year high, Commerzbank AG said in a report.

“We believe the price of cotton is already in a phase of exaggeration and expect a sharp fall in price in the coming months,” the bank said.

The U.S. is the largest exporter. A bale of cotton weighs 480 pounds (218 kilograms).