The origins of cotton production and use go back to ancient times. The first evidence of cotton use was found in India and Pakistan, and dates from about 6,000 B.C. Scientists believe that cotton was first cultivated in the Indus delta.

The species used in ancient South Asia were Gossypium herbaceum and Gossypium arboretum which originated in India and Africa. At a later date cotton production spread to Mesopotamia, Egypt and Nubia. It was only in the 1st century, when Arab traders brought their cotton products to Italy and Spain, that the fiber was introduced in Europe. During the late medieval time, cotton also became known in northern Europe.

By the end of the 16th century, cotton was already cultivated throughout the warmer regions in Asia and America. The newly discovered species were introduced to Africa in the 18th century and later spread to India, Pakistan and China, where they replaced traditional varieties.

The Industrial Revolution brought about the invention of the spinning machine (1738) and the cotton gin (1793), providing a great boost to cotton manufacture, first of all in England. Manchester acquired the nickname "cottonopolis" due to the cotton industry's omnipresence within the city.

Till the middle of the 19th century, India was the main provider of cotton fiber for Europe’s cotton industries. By then, cotton had become the backbone of the southern North American economy, which was essentially based on slavery work. Due to the higher quality of American cotton (longer and stronger fibers) and its cheaper price, European textile manufacturers started purchasing cotton from American plantations.

In China, today’s ICE Futures U.S. (formerly the New York Board of Trade, New York Cotton Exchange)world largest cotton producer, cotton was introduced about 2000 years ago. In the late 1970ties, the Chinese Government took measures to encourage cotton production by subsidizing inputs and offering procurement funds. As a consequence, cotton production rose from 10 million bales in 1979 to nearly 29 million bales in 1984 (1 bale = 500 lbs or 226.8 kg).

Further reading:

Bremen Cotton Exchange

New York Cotton Exchange

Wikipedia: History of cotton