The blockade cut off most of the cotton exports and cut the south's access to hard currency.
The south thought that England and France would eventually come to the south's aid because they needed the cotton. And the south thought that New England would crash without the southern cotton for their mills.
The Union troops were into the south's cotton fields by 1862 and the New England mills had more cotton than they needed and were exporting the extra to Europe. England and France saw the Civil War coming so they had loaded up and had a very large inventory of cotton. India and Egypt ramped up cotton production quickly
Nobody in Virginia grew cotton then. Tobacco maybe.